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    Trade setup for Aug 12: Nifty50 may approach 17,800 soon but profit booking cannot be ruled out

    Trade setup for Aug 12: Nifty50 may approach 17,800 soon but profit booking cannot be ruled out

    Trade setup for Aug 12: Nifty50 may approach 17,800 soon but profit booking cannot be ruled out
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    By Sandeep Singh   IST (Updated)

    Mini

    Trade setup for Friday, Aug 12: The Nifty50 may be headed to key resistance in the 17,800-17,900 band in the near term but some profit booking may occur, say experts. Here's what the technical charts suggest:

    Indian equity benchmarks scaled fresh four-month closing peaks on Thursday led by gains in financial and IT shares, after a softer-than-expected inflation reading from the world's largest economy lifted global markets.
    What do the charts suggest for Dalal Street?
    The Nifty50 has formed a small negative candle on the daily chart following a gap-up opening, reflecting upside momentum in the market with rangebound action, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
    There is no indication of a reversal unfolding at the highs, he pointed out.
    Profit booking possible in Nifty Bank 
    "The Nifty Bank has taken out an immediate hurdle at 38,400, which will act as support on the downside," said Kunal Shah, Senior Technical Analyst at LKP Securities.
    "A move above next resistance at 39,000 on a closing basis will extend all the way to 40,000. The index is trading in overbought territory and profit booking cannot be ruled out," he said.
    Here are key things to know about the market ahead of the August 12 session:
    SGX Nifty
    On Friday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — fell as much as 33 points or 0.2 percent to 17,655.5 ahead of the opening bell on Dalal Street.
    Global markets
    Equities in other Asian markets saw mixed moves early on Friday, mirroring the trend on Wall Street overnight, with MSCI's broadest index of Asia Pacific shares outside Japan flat.
    Japan's Nikkei 225 jumped 2.4 percent as the market resumed trding fter a day's holiday. China's Shanghai Composite and Hong Kong's Hang Seng were down 0.1 percent each.
    S&P 500 futures edged up 0.1 percent. On Thursday, the S&P 500 fell 0.1 percent and the Nasdaq Composite 0.6 percent, though the Dow Jones eked out a gain of 0.1 percent. Investors hope the Fed could slow interest rate hikes against warnings that the battle with rising prices was far from over.
    What  to expect on Dalal Street
    HDFC Securities' Shetti believes the Nifty50's short-term trend remains positive. 
    "Our near-term target remains intact around 17,800-17,900 levels. There is a possibility of selling pressure emerging from the highs, with immediate support at 17,550," he said. 
    Key levels to watch out for
    Both the Nifty50 and the Nifty Bank are about six percent above their long-term simple moving averages in a bullish sign.
    Period (No. of sessions)SMA
    Nifty50Nifty Bank
    517,657.8
    38,864.5
    1017,637.738,728.5
    2017,57938,511.6
    5017,453.238,143.1
    10017,164.6
    37,664.1
    20016,704.536,533.8
    FII/DII activity
    Call/put open interest
    The maximum call open interest is accumulated at the strike price of 17,700, with 2.1 lakh contracts, and the next highest at 18,000, with 1.8 lakh, according to exchange data. On the other hand, the maximum put open interest is at 17,300, with 1.6 lakh contracts, and 17,650, with 1.4 lakh.
    This suggests immediate resistance at 17,700 before the major hurdle of 18,000, and support at 17,650 followed by 17,300.
    Long build-up
    Here are five stocks that saw an increase in open interest as well as price:
    StockCurrent OICMPPrice changeOI change
    GUJGASLTD4,432,500462.32.08%18.27%
    JUBLFOOD10,353,7505913.70%18.25%
    CHAMBLFERT6,982,500336.752.54%11.56%
    BATAINDIA2,107,6001,916.651.62%10.74%
    GLENMARK7,213,950388.82.97%10.03%
    Long unwinding
    StockCurrent OICMPPrice changeOI change
    AARTIIND3,759,550815.6-1.11%-10.22%
    NTPC62,238,300154.3-1.47%-8.62%
    HINDALCO28,632,625433.35-1.04%-5.38%
    METROPOLIS874,2001,495-1.64%-4.74%
    COROMANDEL1,353,8001,071.65-0.89%-4.55%
    (Increase in price and decrease in open interest)
    Short covering
    StockCurrent OICMPPrice changeOI change
    MGL3,520,800866.58.21%-11.59%
    EICHERMOT4,068,0503,165.050.50%-8.05%
    COALINDIA36,540,000219.80.90%-8.00%
    IDFCFIRSTB208,215,00045.250.89%-6.59%
    CUMMINSIND3,467,4001,244.456.37%-6.13%
    (Increase in price and decrease in open interest)
    Short build-up
    StockCurrent OICMPPrice changeOI change
    IRCTC12,791,625662.5-1.45%12.41%
    GAIL47,384,800129.45-1.56%8.12%
    GNFC4,362,800747.8-2.24%4.92%
    MFSL1,727,700781.2-0.17%4.70%
    ASHOKLEY39,430,000146.9-0.54%3.91%
    (Decrease in price and increase in open interest)
    52-week highs
    A total of 22 stocks in the BSE 500 universe — the broadest index on the bourse — scaled 52-week peaks.
    ADANIENTICICIBANK
    AIAENGINDHOTEL
    BANKBARODAJKPAPER
    BELJYOTHYLAB
    COALINDIAMETROBRAND
    DEEPAKFERTSCHAEFFLER
    DEVYANISIEMENS
    EICHERMOTSKFINDIA
    EIDPARRYTIMKEN
    FEDERALBNKTRENT
    HALTVSMOTOR
    52-week lows
    On the flipside, two stocks in the 500-scrip basket hit 52-week lows: Alembic Pharma and Medplus Health.
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