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Trade setup: Nifty technical view, Q3 results, stocks under F&O ban; things to know before market opening bell

Benchmark indices Sensex and Nifty are likely to open lower on Friday as trends on SGX Nifty indicated a gap-down opening with a loss of 141 points or 0.79%. Ahead of today’s trading session, the Nifty futures were trading around 17,659 level on the Singaporean Exchange.

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Benchmark indices Sensex and Nifty are likely to open lower on Friday as trends on SGX Nifty indicated a gap-down opening

Indian equity markets on Thursday slipped one per cent, continuing the steep fall for the third consecutive session as consistent FII selling, elevated oil prices, rising inflation concerns and possibility of Fed interest rate hike weighed on investor sentiment. Benchmark indices Sensex and Nifty are likely to open lower on Friday as trends on SGX Nifty indicated a gap-down opening with a loss of 141 points or 0.79%. Ahead of today’s trading session, the Nifty futures were trading around 17,659 level on the Singaporean Exchange. “Major events like upcoming budget and various state election could lead to higher volatility in coming days. Hence, we advise trader to remain cautious and keep positions light. Investors can use dip in the market as an opportunity to accumulate quality stocks for long term portfolio,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.

Key to watch out for before market opening bell

Global cues: Markets in Asia fell on Friday, tracking declines on Wall Street overnight. Japan’s Nikkei 225 fell 1.54%, and the Topix was down 1.33%. South Korea’s Kospi index was down 1% while Taiwan’s Taiex fell 1.13%. Hong Kong’s Hang Seng index also slipped 0.23% in early trade. Mainland Chia stocks declined, with the Shanghai composite dipping 0.47% and the Shenzhen component down 0.46%. Meanwhile, over on Wall Street, stocks fell. The Nasdaq Composite ended the session down 1.3% while the Dow Jones Industrial Average fell 313.26 points, closing below its 200-day moving average for the first time since December 2021. Headline S&P 500 index also fell 1.1% on Thursday.

Nifty technical view: A long bear candle was formed on the daily chart with lower shadow. This is back to back three such negative candles in a row in the last three sessions. Technically, this pattern signal a sharp profit booking in the market from the highs of 18350 levels and the formation of lower shadow on Thursday could signal chances of buying emerging from the lower support of 17650 levels. Nifty is now placed at the support of 17650-17700 levels (value area in terms of previous swing highs and lows as per the concept of change in polarity), according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

“Having declined swiftly from the highs, there is a higher chance of upside bounce emerging from the lower levels. The confirmation by the way of higher bottom reversal could open the quantum of upside bounce in the market ahead. The short term trend of Nifty continues to be down and there is no clear evidence of bottom formation at the lows. A sustainable upmove in the subsequent session is likely to confirm higher bottom reversal in the market. The lower area of 17650-17600 levels is expected to be a strong support zone for the market ahead,” Shetti said.

Key support, resistance levels for Nifty: Technically, the nifty index has corrected almost 700 points in the last three sessions as the Bearish Engulfing pattern indicated the further correction on the daily chart. However, in the recent candle the index has tested immediate support at 38.2% RL of its previous rally. Moreover, the index has failed to sustain below 21 – days SMA that suggests further support around 17640 levels, below that the correction may extend till 17400/17300 levels. At present, the Index has support at 17640/17500 levels while resistance comes at 18000 levels. On the other hand, Bank nifty has support at 37500 levels while resistance at 38400 levels, said Sachin Gupta, AVP Research, Choice Broking.

Nifty Call, PUT OI: Maximum Call open interest was seen at 18,000 strike, followed by 19,000 strike, and 18,500 strike. Call writing was seen at 19,000 strike, followed by 18,000 strike, and 18,500 strike. Maximum Put open interest was seen at 18,000 strike, followed by 17,000 strike, and 17,500 strike. Put writing was seen at 18,000 strike, followed by 17,800 strike, and 17,600 strike.

Q3 Results Today: Reliance Industries (RIL), HDFC Life Insurance Company, SBI Life Insurance Company, JSW Steel, Bandhan Bank, CSB Bank, California Software, Elixir Capital, Gland Pharma, Gokaldas Exports, Heritage Foods, Hindustan Zinc, IDBI Bank, Vodafone Idea, Inox Leisure, Jyothy Labs, Kajaria Ceramics, L&T Finance Holdings, Max Ventures and Industries, Oriental Aromatics, Pioneer Distilleries, PNB Gilts, Polycab India, PVR, Ramco Industries, RattanIndia Power, Share India Securities, Supreme Petrochem, Supriya Lifescience, Tanla Platforms, Vinyl Chemicals, and Wendt (India) will announce their quarterly earnings on Friday (January 21).

FII and DII data: Foreign institutional investors (FIIs) net offloaded shares worth Rs 4,679.84 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 769.26 crore in the Indian equity market on Thursday, according to the provisional data available on the NSE.

Stocks under F&O ban on NSE: BHEL, Escorts, Granules India, Indiabulls Housing Finance, and Vodafone Idea are the stocks under the F&O ban for 21 January. If the open interest of any stock crosses 95% of the MWPL (market-wide positions limits), all F&O contracts of that stock enter a ban period.

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