Nifty Trade Setup

Bulls maintained their control over Dalal Street for another session on December 2, helping the benchmark Nifty 50 recover all of last Thursday's losses in just two following sessions. The positive bias in the momentum indicator RSI and its sustained position above short-term moving averages (10-20-day EMA) signal that the index may make another attempt to surpass 24,350, a critical hurdle since last week. If the index sustains above this level, the possible targets are 24,550 (the high of November) and 24,800 (50 percent Fibonacci retracement from the record high to the November low). However, the support remains in the 24,000-23,900 zone, experts said.

Here are 15 data points we have collated to help you spot profitable trades:

1) Key Levels For The Nifty 50 (24,276)

Resistance based on pivot points: 24,307, 24,377, and 24,489

Support based on pivot points: 24,084, 24,014, and 23,903

Special Formation: The Nifty 50 formed a bullish candlestick pattern with a lower shadow on the daily charts, indicating buying interest at lower levels, with a higher high-higher low formation. It also sustained in the upper band of Bollinger Bands, signaling a positive trend. The momentum indicator RSI at 52 remained in the upper band.

2) Key Levels For The Bank Nifty (52,109)

Resistance based on pivot points: 52,192, 52,311, and 52,503

Support based on pivot points: 51,808, 51,689, and 51,497

Resistance based on Fibonacci retracement: 52,133, 52,681

Support based on Fibonacci retracement: 51,259, 50,273

Special Formation: The Bank Nifty formed a Doji-like candlestick pattern on the daily timeframe, indicating indecision between bulls and bears. The index stayed above all key moving averages and remained in the upper band of Bollinger Bands, along with a positive bias in the momentum indicators RSI and MACD (Moving Average Convergence Divergence), signaling a possible upward trend.

3) Nifty Call Options Data

According to the weekly options data, the maximum open interest was seen at the 25,000 strike (with 1.3 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 24,800 strike (94.2 lakh contracts), and the 25,500 strike (79.33 lakh contracts).

Maximum Call writing was observed at the 24,800 strike, which saw an addition of 43.21 lakh contracts, followed by the 25,000 and 24,600 strikes, which added 34.64 lakh and 28.67 lakh contracts, respectively, while the maximum Call unwinding was seen at the 24,000 strike, which shed 5.14 lakh contracts, followed by the 24,150 and 24,200 strikes, which shed 2.83 lakh and 2.35 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 24,000 strike holds the maximum open interest (with 1.14 crore contracts), which can act as a key support level for the Nifty. It was followed by the 23,500 strike (98.4 lakh contracts), and the 24,100 strike (77.73 lakh contracts).

The maximum Put writing was placed at the 24,000 strike, which saw an addition of 45.56 lakh contracts, followed by the 23,600, and 24,100 strikes, with 39.39 lakh, and 34.4 lakh contracts added, respectively, while the maximum Put unwinding was seen at the 25,000 strike, which shed 8,825 contracts, followed by the 24,850 strike which shed 575 contracts.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 54,000 strike, with 16.59 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 53,000 strike (13.7 lakh contracts) and the 52,500 strike (9.55 lakh contracts).

Maximum Call writing was visible at the 54,000 strike (with the addition of 2.73 lakh contracts), followed by the 52,000 strike (94,890 contracts) and the 53,000 strike (83,505 contracts), while the maximum Call unwinding was seen at the 54,300 strike, which shed 32,235 contracts, followed by the 53,800 and 53,700 strikes, which shed 27,600 and 20,595 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 50,000 strike holds the maximum open interest (with 11.97 lakh contracts), which can act as a key support level for the index. This was followed by the 52,000 strike (11.38 lakh contracts) and the 51,000 strike (9.61 lakh contracts).

The maximum Put writing was observed at the 50,000 strike (which added 1.63 lakh contracts), followed by the 52,100 strike (1.27 lakh contracts) and the 52,000 strike (72,585 contracts), while the maximum Put unwinding was seen at the 52,700 strike, which shed 16,830 contracts, followed by the 52,600 and 52,800 strikes, which shed 14,955 and 11,100 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, climbed to 1.22 on December 2, from 1.08 level in the previous session.

The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.

9) India VIX

The India VIX, the volatility index, climbed after a sharp fall the previous day and remained below the 15 mark, at 14.7, increasing by 1.91 percent from 14.43. It needs to fall to around the 12-13 zone for bulls to feel more comfortable.

10) Long Build-up (100 Stocks)

A long build-up was seen in 100 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (14 Stocks)

14 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.

12) Short Build-up (56 Stocks)

56 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.

13) Short-Covering (55 Stocks)

55 stocks saw short-covering, meaning a decrease in OI, along with a price increase.

14) High Delivery Trades

Here are the stocks that saw a high share of delivery trades. A high share of delivery reflects investing (as opposed to trading) interest in a stock.

15) Stocks Under F&O Ban

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.

Stocks added to F&O ban: RBL Bank

Stocks retained in F&O ban: Nil

Stocks removed from F&O ban: Nil