Moneycontrol
May 07, 2017 03:31 PM IST | Source: Moneycontrol.com

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

The Nifty50 bounced back from its crucial support of 13-days exponential moving average (DEMA) but closed below its crucial resistance level of 9,300 on Friday and made a bearish engulfing pattern on the daily charts.

The Nifty50 bounced back from its crucial support of 13-days exponential moving average (DEMA) but closed below its crucial resistance level of 9,300 on Friday and made a bearish engulfing pattern on the daily charts.

A bearish candlestick pattern suggests that bears were able to regain control after a positive opening and pared most of the gains made in the last six trading sessions. It is usually seen as the end of an uptrend and traders should tread with caution.

If Nifty settles below 9,269 then it can go down all the way down towards 9,100 levels eventually opening the doors for a short-term trend reversal.  Hence, to prevent this kind of gloomy outlook market need to bounce back from the immediate support levels placed in the zone of 9250 – 9225 level, suggest experts.

We have collated top ten data points on how to help you in spotting profitable trade:

Key Support & Resistance Level for Nifty:

The Nifty50 closed below its crucial support level of 9,300. It took support at its 13-DEMA placed at 9,272. According to Pivot charts, the key support level for Nifty50 is placed at 9,245, followed by 9,206. If the index starts to move higher then key resistance levels to watch out are 9,350, followed by 9,416.

Nifty Bank:

Nifty Bank closed 115 points lower or 0.5 percent at 22,604 on Friday. Important Pivot level which will act as crucial support for the index is placed at 22,461, followed by 22,317. On the upside, the key resistance level is 22,801 followed by 22,997.

Call Options Data:

Maximum Call open interest (OI) of 54 lakh contracts stands at strike price 9,400 which will act as a crucial resistance level for the index in May series, followed by 9,500 which now holds 52 lakh contracts in open interest and 9,600 which has accumulated 30 lakh contracts in OI.

Call Writing was seen at strike prices 9,300 (4.9 lakh contracts added), followed by 9,400 (9.7 lakh contracts added), 9,500 (3.1 lakh contracts added), and 9,600 (1.9 lakh contracts added).

Call unwinding was seen at strike prices 8,800 (0.5 lakh contracts shed), followed by 8,900 (0.2 lakh contracts were shed), and a marginal decline in strike prices 9,000, and 8,700.

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Put Options Data:

Maximum Put OI of 48 lakh contracts was seen at strike price 9,300 which will act as a crucial base for the index in May series followed by 9,200 which has accumulated 46 lakh contracts in open interest, and 9,000 which now holds 45 lakh contracts in open interest.

Put writing was seen at strike prices 9,400 (0.6 lakh contracts added) while Put Unwinding was seen at strike prices 9,300 (8.2 lakh contracts shed), 9,200 (3.9 lakh contracts shed), 9,100 (3.5 lakh contracts shed), and 9000 (3.9 lakh contracts shed).

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FII & DII Data:

The foreign institutional investors (FIIs) sold shares worth Rs364 crore compared to domestic institutional investors who bought Rs298 crore in Indian equity market.

Stocks with high Delivery %:

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

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12 stocks saw Long Buildup:

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36 stocks saw short covering:

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

 

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84 stocks saw Long Unwinding:

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

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74 stocks saw Short Buildup:

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

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