Trade Setup for Wednesday: Top 10 things you should know before Opening Bell
Bulls managed to bring the index back above its crucial level of 9,850 which is a positive sign, but the overall trend still remains on the downside and we could retest 9,700 levels.
Moneycontrol News
The NSE Nifty which slipped towards its crucial support of 9,800 level managed to recoup losses towards the end of the trading day on Tuesday and made an indecisive pattern in the form of ‘Dragonfly Doji’ kind of a pattern on charts.
Dragonfly Doji pattern signals indecision among traders but it also points to the fact that bulls managed to bring the index back above its crucial level of 9,850 which is a positive sign, but the overall trend still remains on the downside and we could retest 9,700 levels.
The Nifty opened at 9,875.25 and closed at 9,871.50 with a loss of just 1.1 point from its previous closing level of 9,872.60. The index rose marginally to 9,891.35 which made a small upper shadow while it slipped to an intraday low of 9,813 which resulted in long lower shadow.
The Nifty index continued its selling pressure for the sixth consecutive session and retested the recent support of 9,820 zones.
“After 5 days of consecutive fall Nifty50 registered a Doji kind of indecisive formation suggesting that bears are clueless around 9,800 level, as a result, some short covering might have taken place at lower levels which resulted in pullback,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“If the index trades above 9,800 level a tradable bounce into the zone of 9,915–9,960 can be expected in the index going forward and a close above 9,960 can be a sign of strength for expansion of this pullback attempt,” he said.
We have collated the top ten data points to help you spot profitable trade:
Key Support & Resistance Level for Nifty:
The Nifty closed at 9,871.50 on Tuesday. According to Pivot charts, the key support level for Nifty is placed at 9,825.88, followed by 9,780.27. If the index starts to move higher, key resistance levels to watch out are 9,904.23, followed by 9,936.97.
Nifty Bank:
The Nifty Bank closed at 24,199.15, up 0.14 percent on Tuesday. The important Pivot level which will act as crucial support for the index is placed at 24,065.43, followed by 23,931.67. On the upside, the key resistance level is 24,284.93, followed by 24,370.67.
Call Options Data:
Maximum Call open interest (OI) of 59.28 lakh contracts stands at strike price of 10,000 which will act as a crucial resistance level for the index in September series, followed by 10,200 which now holds 52.53 lakh contracts in open interest and 9,900 which has accumulated 50.08 lakh contracts in OI.
Call Writing was seen at strike prices 9,900 (10.71 lakh contracts added), followed by 9,800 (0.96 lakh contracts were added).
Meanwhile, Call unwinding was seen at strike prices 10,000 (5.12 lakh contracts shed), 10,200 (5.10 lakh contracts shed), and 10,100 (3.87 lakh contracts shed).
Put Options Data:
Maximum Put OI of 43.71 lakh contracts was seen at strike price 9,800 which will act as a crucial base for the index in September series, followed by 9,700 which has accumulated 37.76 lakh contracts in open interest, and 9,500 which now holds 35.01 lakh contracts in open interest.
Put writing was seen at strike prices 9,800, which saw the addition of 6.37 lakh contracts, followed by 9,500 that added 1.2 lakh shares in OI.
Meanwhile, Put unwinding was seen at strike prices 10,000, which shed 7.75 lakh contracts, followed by 10,100, which saw the shedding of 3.05 lakh contracts and 9,900, which shed 2.71 lakh contracts.
FII & DII Data:
Foreign institutional investors (FIIs) continued to be net sellers on Tuesday. They sold equity shares worth Rs 1,915.54 crore but domestic institutional investors (DIIs) bought shares worth Rs 1,537.1 crore in the Indian equity market.
Stocks with high delivery percentage:
High delivery percentage suggests that investors are accepting the delivery of the stock, which means that investors are bullish on the stock.
70 stocks saw Long Buildup:
52 stocks saw Short Covering:
A decrease in open interest along with an increase in price mostly indicates short covering.
24 stocks saw Long Unwinding:
Long Unwinding happens when there is a decrease in OI as well as in price.
66 stocks saw Short Buildup
An increase in open interest along with a decrease in price mostly indicates short positions being built up.
