Trade Setup for Friday: Top 15 things to know before Opening Bell

The market rallied sharply and touched a historical high in morning trade before reversing all gains later on May 23. This was despite trends indicating a thumping victory for BJP-led NDA in Lok Sabha 2019 elections.

Benchmark indices posted biggest intraday fall in 11 years with the BSE Sensex down 1,314 points and Nifty 384 points from record highs of 40,124.96 and 12,041.15, respectively.

At close, the BSE Sensex was down 298.82 points at 38,811.39 while the Nifty 50 shed 80.90 points to 11,657 and formed larger bearish candle on the daily charts.

"The Nifty has formed a huge bearish outside bar on the daily chart, which shows exhaustion in the market. The inherent weakness is being reflected in the broader market indices as well. Thus the selling pressure is likely to continue going ahead," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.

He said on the downside, 11,591 & 11,426 are the key levels to watch out for with the overall short term target at 11,000. From the trading perspective, sell on rise would be the preferred strategy going ahead, he advised.

On the higher side, 11,770-11,800 shall act as a key area where one can look to initiate a fresh short position, according to him.

Shabbir Kayyumi, Head of Technical Research, Narnolia Financial Advisors said one has to opt for sell on rise strategy unless it closes above 11,800 levels. "As long as the index is trading below 11,883 can extend towards 20 DMA placed at 11,514 and lower."

The broader markets also caught in a bear trap with the Nifty Midcap and Smallcap indices falling 0.2 percent each. All sectoral indices closed in red with Nifty FMCG (down 1.7 percent) and Metal (1.5 percent) losing most.

We have collated 15 data points to help you spot profitable trades:

Key support and resistance level for Nifty

Nifty closed at 11,657.05 on May 23. According to the Pivot charts, the key support level is placed at 11,500.6, followed by 11,344.2. If the index starts moving upward, key resistance levels to watch out are 11,927.3 and 12,197.6.

Nifty Bank

The Nifty Bank index closed at 30,409.10, down 117.70 points on May 23. The important Pivot level, which will act as crucial support for the index, is placed at 29,899.27, followed by 29,389.43. On the upside, key resistance levels are placed at 31,311.96, followed by 32,214.83.

Call options data

Maximum Call open interest (OI) of 47.74 lakh contracts was seen at the 12,000 strike price. This will act as a crucial resistance level for the May series.

This was followed by 12,200 strike price, which now holds 25.14 lakh contracts in open interest, and 11,800, which has accumulated 19.23 lakh contracts in open interest.

Significant Call writing was seen at the strike price of 12,000, which added 9.9 lakh contracts, followed by 12,200 strike price that added 7.9 lakh contracts and 11,800 strike price that added 5.48 lakh contracts.

Call unwinding was seen at the strike price of 11,300, which shed 1.08 lakh contracts, followed by 11,400 strike which shed 0.77 lakh contracts.

Put options data

Maximum Put open interest of 22.37 lakh contracts was seen at 11,500 strike price. This will act as a crucial support level for the May series.

This was followed by 11,300 strike price, which now holds 15.87 lakh contracts in open interest and 11,700 strike price, which has now accumulated 15.72 lakh contracts in open interest.

Put writing was seen at the strike price of 11,600, which added 3.31 lakh contracts, followed by 11,300 strike price that added 3.27 lakh contracts and 11,800 strike price that added 3.06 lakh contracts.

Put unwinding was seen at the strike price of 11,200, which shed 1.42 lakh contracts, followed by 11,700 strike which shed 0.73 lakh contracts.

Stocks with a high delivery percentage

High delivery percentage suggests investors are accepting the delivery of the stock, which means that investors are bullish on it.

48 stocks saw a long buildup

36 stocks that saw short covering

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

78 stocks saw a short build-up

An increase in open interest along with a decrease in price mostly indicates a build-up of short positions.

35 stocks saw long unwinding

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FII & DII data

Foreign Institutional Investors (FIIs) net bought shares worth Rs 1,352.2 crore while Domestic Institutional Investors (DIIs) sold Rs 593.54 crore worth of shares in the Indian equity market on May 23, as per provisional data available on the NSE.

Fund Flow Picture

Stocks in news

Results on May 24: About 172 companies will announce their March quarter earnings on Friday.

General Insurance Corporation of India Q4: Profit falls to Rs 603.37 crore versus Rs 751.61 crore, gross premiums were written down at Rs 8,089.35 crore versus Rs 8,525.02 crore; underwriting profit at Rs 157.8 crore versus loss of Rs 1,219 crore YoY.

Rane (Madras) Q4: Consolidated net loss at Rs 7.8 crore versus Rs 9 crore profit; revenue falls 12 percent to Rs 377 crore versus Rs 428 crore YoY.

HealthCare Global Enterprises Q4: Loss at Rs 8.72 crore versus profit at Rs 2.59 crore; revenue rises to Rs 257.92 crore versus Rs 222.27 crore YoY.

Sun TV Network Q4: Profit slips to Rs 283 crore versus Rs 290 crore; revenue jumps to Rs 888.9 crore versus Rs 717 crore YoY.

Novartis India Q4: Profit falls to Rs 19.53 crore versus Rs 26.47 crore; revenue declines to Rs 110.38 crore versus Rs 125.32 crore YoY.

eClerx Services Q4: Profit jumps to Rs 59.2 crore versus Rs 39 crore; revenue rises to Rs 365.1 crore versus Rs 357.63 crore YoY.

Cipla: Company signed an agreement to acquire 26 percent stake on a fully diluted basis in AMPSolar Power Systems Private Limited.

Om Metals Infraprojects: Company partly sold its packing division.

Analyst or Board Meet/Briefings

Riddhi Siddhi Gluco Biols: Board to consider March quarter results on May 30.

Jain Irrigation Systems: Board to consider March quarter results on May 30.

Technofab Engineering: Board to consider March quarter results on May 30.

KSK Energy Ventures: Board to consider March quarter results on May 30.

Siti Networks: Board to consider March quarter results on May 30.

eClerx Services: 19th Annual General Meeting to be held on August 29.

Tejas Networks: The company is organising its Analyst Day on May 31.

Two stocks under ban period on NSE

For May 24, Adani Power and IDBI Bank are under a ban period.

Securities in ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.