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

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

20 Dec , 2024 By : Debdeep Gupta

Nifty Trade Setup

The market continued to reel under pressure for the fourth consecutive session on December 19, falling by 1 percent after the Federal Reserve indicated only two interest rate cuts for 2025. Amid the decline, the Nifty 50 managed to defend 23,900 on a closing basis. As long as the index stays above this level amid likely consolidation, 24,050 (50% Fibonacci retracement) is the immediate hurdle, followed by 24,350 (which coincides with the 10, 20, and 100 DEMA) as the key resistance going forward. However, in case of further declines, 23,700 (200-day EMA) can't be ruled out, according to experts.

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

1) Key Levels For The Nifty 50 (23,952)

Resistance based on pivot points: 23,994, 24,025, and 24,077

Support based on pivot points: 23,891, 23,859, and 23,808

Special Formation: The Nifty 50 formed a bullish candlestick pattern with a minor upper shadow on the daily charts, as the closing was higher than the opening levels. It is trading near the lower end of the Bollinger Bands. The index is now below all key moving averages (except the 200-day EMA), while the momentum indicators RSI (Relative Strength Index at 40) and MACD (Moving Average Convergence Divergence) showed a negative crossover, indicating weakness.

2) Key Levels For The Bank Nifty (51,576)

Resistance based on pivot points: 51,744, 51,868, and 52,069

Support based on pivot points: 51,342, 51,218, and 51,017

Resistance based on Fibonacci retracement: 52,124, 52,684

Support based on Fibonacci retracement: 51,353, 50,670

Special Formation: The Bank Nifty also moved closer to the lower band of the Bollinger Bands on Thursday, forming a bullish candlestick pattern with both upper and lower shadows on the daily timeframe, indicating volatility. The banking index traded below all key moving averages (except the 200-day EMA), while there was a negative crossover by the momentum indicators RSI and MACD, signaling weakness. The index declined by 1 percent.

3) Nifty Call Options Data

According to the monthly options data, the 25,000 strike holds the maximum Call open interest (with 1.13 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 24,500 strike (66.39 lakh contracts), and the 25,500 strike (65.09 lakh contracts).

Maximum Call writing was observed at the 25,000 strike, which saw an addition of 34.4 lakh contracts, followed by the 24,000 and 25,500 strikes, which added 33.2 lakh and 20.55 lakh contracts, respectively, while the maximum Call unwinding was seen at the 24,900 strike, which shed 13.75 lakh contracts, followed by the 24,700 and 24,800, which shed 8.3 lakh and 7.42 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 24,000 strike (with 82.47 lakh contracts), which can act as a key level for the Nifty. It was followed by the 23,000 strike (82.33 lakh contracts), and the 23,500 strike (66.13 lakh contracts).

The maximum Put writing was placed at the 23,000 strike, which saw an addition of 22.53 lakh contracts, followed by the 22,500, and 24,000 strikes, with 14.74 lakh, and 14.59 lakh contracts added, respectively, while the maximum Put unwinding was seen at the 24,500 strike, which shed 9.85 lakh contracts, followed by the 24,300 and 24,600 strikes, which shed 4.64 lakh and 3.59 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 41.87 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 (28.81 lakh contracts) and the 53,000 strike (25.24 lakh contracts).

Maximum Call writing was visible at the 51,500 strike (with the addition of 8.42 lakh contracts), followed by the 52,000 strike (6.64 lakh contracts) and the 51,600 strike (3.9 lakh contracts), while the maximum Call unwinding was seen at the 53,000 strike, which shed 2.14 lakh contracts, followed by the 54,000 and 53,300 strikes, which shed 2.04 lakh and 1.07 lakh contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 50,000 strike (with 16.55 lakh contracts), which can act as a key support level for the index. This was followed by the 51,000 strike (13.36 lakh contracts) and the 51,500 strike (11.58 lakh contracts).

The maximum Put writing was observed at the 51,500 strike (which added 4.44 lakh contracts), followed by the 49,500 strike (3.39 lakh contracts) and the 51,300 strike (3.21 lakh contracts), while the maximum Put unwinding was seen at the 52,500 strike, which shed 4.11 lakh contracts, followed by the 52,000 and 50,000 strikes, which shed 3.87 lakh and 2.06 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, jumped to 0.91 on December 19, from 0.55 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 fear indicator, increased by 0.96 percent to the 14.51 level, which is still in the higher zone, causing discomfort for bulls.

10) Long Build-up (45 Stocks)

A long build-up was seen in 45 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (54 Stocks)

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

12) Short Build-up (99 Stocks)

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

13) Short-Covering (26 Stocks)

26 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.