Nifty Trade Setup

The benchmark Nifty 50 closed moderately lower amid volatility on December 9, extending losses for the second consecutive session. The formation of a Doji pattern signaled indecision between buyers and sellers. The index failed to close above 24,700 (20-week SMA) for three consecutive days, which is a crucial level for further upside toward 24,800 (50% Fibonacci retracement), the first target, followed by the 25,000 mark. However, as long as it stays below 24,700 on a closing basis, consolidation may continue, with immediate support at 24,500 and then at the 24,200 level, according to experts.

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

1) Key Levels For The Nifty 50 (24,619)

Resistance based on pivot points: 24,682, 24,712, and 24,760

Support based on pivot points: 24,587, 24,558, and 24,510

Special Formation: The Nifty 50 remained above all key moving averages, with the 10-day EMA (Exponential Moving Average) on the verge of surpassing the 50-day EMA on the upside after crossing the 100-day EMA last week, indicating a positive trend. The momentum indicator MACD (Moving Average Convergence Divergence) remained above the zero line with an upward bias, while the RSI (Relative Strength Index) stayed in the upper band.

2) Key Levels For The Bank Nifty (53,408)

Resistance based on pivot points: 53,675, 53,780, and 53,952

Support based on pivot points: 53,332, 53,226, and 53,054

Resistance based on Fibonacci retracement: 54,467, 55,740

Support based on Fibonacci retracement: 52,921, 52,321

Special Formation: The Bank Nifty, on Monday, formed a Gravestone Doji pattern on the daily charts, following a Tweezer Top pattern last Friday. Both are bearish reversal patterns, but participants must wait for the following sessions, as the index is still trading well above all key moving averages on the daily and weekly charts, with an expansion in Bollinger Bands, signaling a positive trend.

3) Nifty Call Options Data

According to the weekly options data, the 25,500 strike holds the maximum open interest (with 1.11 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,000 strike (1.06 crore contracts), and the 24,700 strike (97.33 lakh contracts).

Maximum Call writing was observed at the 24,700 strike, which saw an addition of 42.91 lakh contracts, followed by the 25,500 and 25,000 strikes, which added 35.99 lakh and 35.08 lakh contracts, respectively, while the maximum Call unwinding was seen at the 24,200 strike, which shed 41,925 contracts, followed by the 24,000 and 24,850 strikes, which shed 23,075 and 23,050 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 24,000 strike (with 85.6 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 24,500 strike (61.66 lakh contracts), and the 24,600 strike (49.87 lakh contracts).

The maximum Put writing was placed at the 24,000 strike, which saw an addition of 29.67 lakh contracts, followed by the 24,600, and 23,700 strikes, with 27.14 lakh, and 22.95 lakh contracts added, respectively, while the maximum Put unwinding was seen at the 25,000 strike which shed 54,075 contracts, followed by the 24,200 and 25,100 strikes, which shed 41,325 and 4,725 contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the 54,000 strike holds the maximum Call open interest, with 20.33 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 55,000 strike (19.45 lakh contracts) and the 53,000 strike (12.56 lakh contracts).

Maximum Call writing was visible at the 54,000 strike (with the addition of 3.43 lakh contracts), followed by the 53,500 strike (2.37 lakh contracts) and the 53,600 strike (1.83 lakh contracts), while the maximum Call unwinding was seen at the 52,500 strike, which shed 41,790 contracts, followed by the 52,000 and 53,000 strikes, which shed 27,930 and 26,055 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 52,000 strike (with 18.85 lakh contracts), which can act as a key support level for the index. This was followed by the 52,500 strike (16.03 lakh contracts) and the 53,000 strike (12.42 lakh contracts).

The maximum Put writing was observed at the 53,500 strike (which added 2.84 lakh contracts), followed by the 54,300 strike (1.31 lakh contracts) and the 52,000 strike (1.2 lakh contracts), while the maximum Put unwinding was seen at the 53,000 strike, which shed 33,315 contracts, followed by the 53,100 and 53,800 strikes, which shed 31,230 and 19,650 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, dropped to 0.9 on December 9, from 1.03 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 volatility index declined further and remained below the 15 mark, providing comfort for bulls. The India VIX was down by 0.23 percent to 14.11, from 14.14 levels.

10) Long Build-up (72 Stocks)

A long build-up was seen in 72 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (34 Stocks)

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

12) Short Build-up (85 Stocks)

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

13) Short-Covering (35 Stocks)

35 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: Nil

Stocks retained in F&O ban: Granules India, Manappuram Finance, PVR INOX, RBL Bank

Stocks removed from F&O ban: Nil