Indian headline indices extended gains to a third straight day in a choppy session on Thursday. The Nifty Bank, however, snapped a two-day winning run, with a loss of half a percent.

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What do the charts suggest for Dalal Street now?

The 50-scrip index has formed a small negative candle on the daily chart with a long lower shadow, hinting at the formation of a long legged doji type pattern, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Normally, such a formation following a reasonable upmove calls for correction from the highs, Shetti said. "Having displayed strength in the current bounce, there is a chance of minor downward correction or consolidation in the coming session," he said.

It's bulls vs bears

There is an indication of indecisiveness among the bulls and the bears, according to Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

"The short-term formation is still on the bullish side but before any fresh breakout, the market may consolidate within the range of 17,350-17,575," said Chouhan, who expects the uptrend to be vulnerable if the index slips below the the trend deciding level of 17,350.

Here are key things to know about the market before Friday's session:

SGX Nifty

At 7:54 am on Friday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty50 index -- were down 11.5 points or 0.1 percent at 17,534, suggesting a weak start ahead on Dalal Street.

Global markets

Equities in other Asian markets slipped amid renewed concerns about COVID-19, and as investors awaited key US inflation data that could set direction on interest rates. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.4 percent in early hours.

Japan's Nikkei 225 and China's Shanghai Composite were down 0.4 percent each.

S&P 500 futures were up 0.1 percent in Asia. On Thursday, the S&P 500 fell 0.7 percent and the Nasdaq Composite 1.7 percent, and the Dow Jones ended flat.

What to expect on Dalal Street

The Nifty50's short-term uptrend remains intact, said HDFC Securities' Shetti. "There are chances of some more consolidation or minor weakness in the coming 1-2 sessions before any decisive upside breakout at the 17,550-17,600 hurdle soon," he said.

Independent technical analyst Manish Shah believes it is prudent to be on the long side as long as the index holds above 17,300.

"The Nifty needs to hold above the resistance at 17,400 and should not trade below 17,300 if the rally has to continue... If it sustains the 17,400 mark, we should see more upsides towards 17,850-17,900 levels," he said.

Key levels to watch out for

Nifty50: Immediate support for the index is expected at 17,180 and resistance at 17,700, according to Mohit Nigam, Head-PMS at Hem Securities.

Bank Nifty: The banking index is expected to find support at 36,600 and meet resistance at 37,500, he said.

FII/DII activity

Foreign institutional investors (FIIs) net offloaded Indian equities worth Rs 1,585.6 crore on Thursday. However, domestic institutional investors made net purchases of Rs 782.8 crore, according to provisional exchange data.

Call/put open interest

The maximum call open interest is accumulated at the strike price of 17,700, with 1.2 lakh contracts. The next highest open interest is at 17,550 with 97,000 contracts, and 17,600 with almost 91,000 contracts. On the other hand, the maximum put call open interest is placed at 17,500, with 1.1 lakh contracts, according to exchange data.

This suggests immediate resistance at 17,550-17,600 levels followed by a major hurdle at 17,700, and support at 17,500.

Long build-up

Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

Long unwinding

Short-covering

Short build-up

(Increase in open interest and decrease in price)

52-week highs

In the BSE 500 index, Adani Total Gas, Escorts, Glaxo, Vodafone Idea, Tanla and Zee were among the 11 stocks that hit 52-week highs.

52-week lows

On the other hand, only one stock in the broadest index on the bourse hit a 52-week low: Gulf Oil Lubricants.

Volatility index

NSE's India VIX index — which measures the expectation of volatility — eased for the third day in a row to end at 16.6, its lowest since November 18.

First Published:Dec 9, 2021 7:00 PM IST