Trade setup for Monday: Top 10 things you should know before Opening Bell

Moneycontrol News

The muhurat trading day didn't go the way most investors would have wanted. Weak global cues and muted earnings past week led to a sharp selloff on D-Street. The index made a strong bearish candle on the daily candlestick charts after a ‘Doji’ type pattern.

Formation of a bearish candle after a ‘Doji’ pattern confirms that the near-term outlook looks muted and investors should tread with caution.

The index went up in a straight line after it hit a low of 9,685 recorded on September 28 to a record high of 10,251 hit on October 17, just a few days before Diwali.

The index opened at 10,210.35 and rose marginally higher to hit an intraday high of 10,211.95 on Thursday. It hit an intraday low of 10,123.35 before closing the day 64 points lower at 10,146.55.

“The Nifty is now consolidating above the breakout area and upper band of last three months’ consolidation (10,178) over the last two sessions. The market has absorbed a host of negative events while defending the key value area of 9,700 over the last three months consolidation, which has resulted in a bullish Double Bottom pattern at the identical lows of August and September 2017,” Dharmesh Shah – Head Technical, ICICI Direct.com Research.

“Going forward, we expect the index to remain on a rising trajectory and extend the upmove towards 10,600 in coming months. The measuring implication of the bullish Double Bottom pattern (10,170 to 9,700 = 470 points) added to the breakout point of 10,170 projects upsides toward 10,600 regions over the coming months,” he said.

The market was shut on Friday for Diwali Balipratipada.

We have collated the top ten data points to help you spot profitable trade:-

Key Support & Resistance Level for Nifty

The Nifty closed down 64.40 points at 10,146.50 on Thursday, the first day of Samvat 2074. According to Pivot charts, the key support level is placed at 10,109.2, followed by 10,071.9. If the index starts to move higher, key resistance levels to watch out are 10,197.9 and 10,249.3.

Nifty Bank

The Nifty Bank closed at 24,009.75 on Thursday, down 304 points. Important Pivot level, which will act as crucial support for the index, is placed at 23,870.56; followed by 23,731.33. On the upside, key resistance levels are 24,202.16, followed by 24,394.53.

Call Options Data:

Maximum call open interest (OI) of 46.7 lakh contracts stands at strike price 10,200, which will act as a crucial resistance level for the index in the October series, followed by 10,300, which now holds 38.71 lakh contracts in open interest; and 10,400, which has accumulated 33.03 lakh contracts in OI.

Call writing was seen at strike prices 10,200 (10.81 lakh contracts were added), followed by 10,100 (4.29 lakh contracts added), and 10,300 which added 3.84 lakh contracts.

Call unwinding was seen at strike price 10,700, which shed 0.82 lakh contracts; followed by 10,600, which shed 0.22 lakh contracts; and 9,800, which shed 0.21 lakh contracts.

Put Options Data

Maximum Put OI of 75.18 lakh contracts was seen at strike price 10,000, which will act as a crucial base for the index in October series, followed by 10,100, which now holds 45.59 lakh contracts and 9,800 which has now accumulated 45.27 lakh contracts in open interest.

Put writing was seen at strike prices 9,600 (0.15 lakh contracts added), followed by 10,700 (0.02 lakh contracts added).

Meanwhile, Put Unwinding seen at strike price of 10,200, which saw shedding of 10.52 lakh contracts; followed by 9,900, which saw 3.32 lakh contracts being shed and 9,800, which saw shedding of 2.19 lakh contracts.

FII & DII Data

Foreign institutional investors (FIIs) sold shares worth Rs 43.74 crore on Thursday, while domestic institutional investors bought shares worth Rs 40.78 crore.

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.

7 stocks saw long build-up

4 stocks saw short covering

A decrease in open interest along with an increase in price mostly indicates short covering.

81 stocks saw short build-up

An increase in open interest along with a decrease in price mostly indicates short positions being built up.

120 stocks saw long unwinding

Long Unwinding happens when there is a decrease in OI as well as in price.