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

04 Dec , 2024 By : Debdeep Gupta

Nifty Trade Setup

The market extended its northward journey for the third consecutive session and closed 0.8 percent higher with above-average volumes on the Nifty 50 on December 3. With Tuesday's rally, the Nifty 50 climbed above all key moving averages and saw a falling trendline breakout, signaling a positive trend. Hence, the index may march towards the immediate resistance at 24,550, followed by 24,800, which is the crucial hurdle. The support is placed at 24,300, followed by 24,000, which is a crucial support 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 (24,457)

Resistance based on pivot points: 24,483, 24,531, and 24,608

Support based on pivot points: 24,329, 24,282, and 24,205

Special Formation: The Nifty 50 formed a bullish candlestick pattern on the daily timeframe, continuing its higher highs-higher lows formation. The index saw an Inverted Head and Shoulders pattern breakout, with the momentum indicator RSI (Relative Strength Index) staying in the upper band at 55.7, indicating a positive trend.

2) Key Levels For The Bank Nifty (52,696)

Resistance based on pivot points: 52,780, 52,913, and 53,129

Support based on pivot points: 52,349, 52,216, and 52,001

Resistance based on Fibonacci retracement: 53,463, 54,471

Support based on Fibonacci retracement: 52,479, 51,266

Special Formation: The Bank Nifty saw a two-month-long consolidation breakout on Tuesday and formed a bullish candlestick pattern on the daily timeframe. It also experienced a falling trendline breakout with a positive bias in the momentum indicators RSI (now at 60) and MACD (Moving Average Convergence Divergence). The index closed near the 61.8 percent Fibonacci retracement level from the record high to the November low.

3) Nifty Call Options Data

According to the weekly options data, the 25,000 strike holds the maximum open interest (with 1.33 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 (1.06 crore contracts), and the 24,500 strike (85 lakh contracts).

Maximum Call writing was observed at the 24,900 strike, which saw an addition of 32.65 lakh contracts, followed by the 24,700 and 25,300 strikes, which added 22.2 lakh and 14.75 lakh contracts, respectively, while the maximum Call unwinding was seen at the 24,300 strike, which shed 30.82 lakh contracts, followed by the 24,200 and 24,350 strikes, which shed 19.78 lakh and 10.89 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 23,500 strike (with 1.55 crore contracts), which can act as a key support level for the Nifty. It was followed by the 24,000 strike (1.3 crore contracts), and the 23,800 strike (91.89 lakh contracts).

The maximum Put writing was placed at the 23,500 strike, which saw an addition of 57.07 lakh contracts, followed by the 24,400, and 23,800 strikes, with 37.31 lakh, and 26.48 lakh contracts added, respectively, while the maximum Put unwinding was seen at the 23,600 strike, which shed 4.19 lakh contracts, followed by the 24,150 and 24,100 strikes which shed 1.45 lakh and 1.19 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the 53,000 strike holds the maximum Call open interest, with 15.37 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 54,000 strike (14.66 lakh contracts) and the 55,000 strike (14.39 lakh contracts).

Maximum Call writing was visible at the 52,700 strike (with the addition of 4.32 lakh contracts), followed by the 53,500 strike (2.61 contracts) and the 52,800 strike (2.39 lakh contracts), while the maximum Call unwinding was seen at the 54,000 strike, which shed 1.92 lakh contracts, followed by the 52,500 and 52,000 strikes, which shed 1.62 lakh contracts each.

6) Bank Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 52,500 strike (with 15.6 lakh contracts), which can act as a key support level for the index. This was followed by the 52,000 strike (14.89 lakh contracts) and the 51,000 strike (11.85 lakh contracts).

The maximum Put writing was observed at the 52,500 strike (which added 7.81 lakh contracts), followed by the 52,000 strike (3.51 lakh contracts) and the 53,000 strike (2.52 lakh contracts), while the maximum Put unwinding was seen at the 55,000 strike, which shed 2.66 lakh contracts, followed by the 50,500 and 52,100 strikes, which shed 1.53 lakh and 13,665 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, rose to 1.29 on December 3, from 1.22 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, dropped below all key moving averages, down by 2.23 percent to the 14.37 level, which gave comfort to the bulls. If it sustains below this level, the bulls may enter a more comfortable zone.

10) Long Build-up (84 Stocks)

A long build-up was seen in 84 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (22 Stocks)

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

12) Short Build-up (41 Stocks)

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

13) Short-Covering (80 Stocks)

80 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.