Trade setup for Wednesday: Top 15 things to know before the opening bell- Grow Mudra

Trade setup for Wednesday: Top 15 things to know before the opening bell

18 Dec , 2024 By : Debdeep Gupta

Nifty Sees Selling Pressure

The Nifty 50 recorded a 1.35 percent loss on December 17, extending its downtrend for the second consecutive session, with selling pressure across key sectors ahead of the Fed meeting outcome due on December 18. The index fell below all key moving averages (except for the 200-day exponential moving average), signaling weakness. If the index fails to defend the 24,200-24,000 zone, the bears may gain more strength. However, defending this level on a closing basis could increase the possibility of the index moving towards 24,700, the crucial hurdle on the higher side, experts said.

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

1) Key Levels For The Nifty 50 (24,336)

Resistance based on pivot points: 24,544, 24,619, and 24,742

Support based on pivot points: 24,299, 24,223, and 24,101

Special Formation: The Nifty 50 reported a long bearish candlestick pattern on the daily timeframe, falling below the 10-, 20-, 50-, and 100-day EMAs in a single session and touching the midline of the Bollinger Bands. Additionally, there was a lower high-lower-low formation and a negative crossover in the momentum indicator RSI (Relative Strength Index), signaling weakness.

2) Key Levels For The Bank Nifty (52,835)

Resistance based on pivot points: 53,328, 53,518, and 53,826

Support based on pivot points: 52,712, 52,522, and 52,214

Resistance based on Fibonacci retracement: 54,467, 55,738

Support based on Fibonacci retracement: 52,318, 51,844

Special Formation: The Bank Nifty also formed a long red candle on the daily charts with a lower high-lower low formation, falling below the 10-day EMA but taking support at the 20-day EMA (52,757). The momentum indicator RSI showed a negative crossover, but the index still traded in the upper band of the Bollinger Bands on both the daily and weekly charts.

3) Nifty Call Options Data

According to the weekly options data, the 25,000 strike holds the maximum Call open interest (with 1.4 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,500 strike (1.07 crore contracts), and the 24,700 strike (1.01 crore contracts).

Maximum Call writing was observed at the 24,500 strike, which saw an addition of 74.86 lakh contracts, followed by the 24,400 and 24,600 strikes, which added 61.71 lakh and 59.77 lakh contracts, respectively, while the maximum Call unwinding was seen at the 25,450 strike, which shed 1.16 lakh contracts, followed by the 25,550 and 23,500 strikes, which shed 1.08 lakh and 7,750 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 23,900 strike (with 79.61 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 24,000 strike (77.33 lakh contracts), and the 23,500 strike (62.38 lakh contracts).

The maximum Put writing was placed at the 23,900 strike, which saw an addition of 26.47 lakh contracts, followed by the 23,700, and 24,350 strikes, with 9.5 lakh, and 8.17 lakh contracts added, respectively, while the maximum Put unwinding was seen at the 24,700 strike, which shed 20.37 lakh contracts, followed by the 24,500 and 24,600 strikes, which shed 17.92 lakh and 16.28 lakh 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 34.12 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 53,500 strike (23.79 lakh contracts) and the 54,500 strike (21.18 lakh contracts).

Maximum Call writing was visible at the 53,000 strike (with the addition of 8.21 lakh contracts), followed by the 54,000 strike (7.88 lakh contracts) and the 53,500 strike (6.12 lakh contracts), while the maximum Call unwinding was seen at the 51,900 strike, which shed 4,185 contracts, followed by the 51,700 and 52,000 strikes, which shed 3,765 and 2,670 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 52,000 strike (with 16.92 lakh contracts), which can act as a key support level for the index. This was followed by the 52,500 strike (16.82 lakh contracts) and the 51,000 strike (15.03 lakh contracts).

The maximum Put writing was observed at the 50,700 strike (which added 1.29 lakh contracts), followed by the 52,800 strike (48,750 contracts) and the 51,300 strike (48,630 contracts), while the maximum Put unwinding was seen at the 53,000 strike, which shed 2.75 lakh contracts, followed by the 51,000 and 52,000 strikes, which shed 2.09 lakh and 1.88 lakh contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell further to 0.65 (seen for the first time since March 13) on December 17, from 0.90 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

Volatility continued its upward trend for the second consecutive session, reaching closer to the 14.5 level and making the bulls uncomfortable. The India VIX, the fear gauge, was up by 3.32 percent to 14.49, following a 7.41 percent jump in the previous session.

10) Long Build-up (18 Stocks)

A long build-up was seen in 18 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (66 Stocks)

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

12) Short Build-up (125 Stocks)

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

13) Short-Covering (17 Stocks)

17 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.