Moneycontrol
Aug 13, 2017 08:25 PM IST | Source: Moneycontrol.com

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

The pattern is neutral in nature and suggests that the neither bulls nor bears were able to create a foothold on the D-Street which suggest that there could be a shift in trend soon. However, it does require confirmation.

The Nifty witnessed selling pressure for the fifth consecutive day in a row on Friday and closed around its opening level making a ‘Long-Legged Doji’ pattern on the daily charts and a strong bearish candle on the weekly charts.

Weak global cues pulled the index further below its crucial support level of 50-days exponential moving average 9,786 and as long as the index stays below 9,800 bulls might not get a chance to make a comeback on D-Street.

We are approaching a truncated week as markets will remain shut on Tuesday on account of Independence Day holiday. Traders are advised to stay light and wait for more signs that market has formed a bottom before creating long positions or investing in quality stocks.

A typical long-legged Doji pattern is formed when the opening price is almost equal to the closing price but there was a lot of movement on both the sides. The Nifty opened trading at 9,712.15 and closed at 9,710.80 on Friday.

The Nifty rose to an intraday high of 9771.65 which made a small upper shadow and fell to an intraday low of 9,685.55 which made a small lower shadow on daily intraday charts.

The pattern is neutral in nature and suggests that the neither bulls nor bears were able to create a foothold on the D-Street which suggest that there could be a shift in trend soon. However, it does require confirmation.

“The Nifty registered a Long Leg Doji kind of formation but after taking a cut of 1% with a gap down opening. The intensity of fall with around 4 percent cut on weekly basis is clearly pointing towards more pain going forward,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“If Nifty is unable to get past 9,800 levels in next few trading sessions then correction can be expected to continue towards next logical targets placed around 9400 levels,” he said.

Mohammad advise traders to wait for proper consolidation and more stable signs before creating fresh long positions.

We have collated top ten data points to help you spot profitable trade.

Key Support & Resistance Level for Nifty:

The Nifty closed at 9,712.25, down 108 points on Friday. According to Pivot charts, the key support level is placed at 9,673.68, followed by 9,636.57. If the index starts to move higher, key resistance levels to watch out are 9,759.78 and 9,808.77.

Nifty Bank:

Nifty Bank closed 231.6 points lower at 23,985.75 on Friday. Important Pivot level, which will act as crucial support for the index, is placed at 23,839.0, followed by 23,692.2. On the upside, key resistance level is 24,161.9, followed by 24,338.0.

Call Options Data:

Maximum Call open interest (OI) of 54.76 lakh contracts stands at strike price 10,000, which will act as a crucial resistance level for the index in the August series, followed by 10,100, which now holds 50.21 lakh contracts in open interest, and 10,200, which has accumulated 47.11 lakh contracts in OI.

Call writing was seen at strike prices — 9,800 (17.99 lakh contracts added), followed by 9,700 (9.03 lakh contracts added), and 9,900, which saw the addition of 5.51 lakh contracts.

Meanwhile, Call unwinding was seen at strike prices 10,300 (2.88 lakh contracts were shed), followed by 10,100 (1.71 lakh contracts shed) and 10,200 which shed 1.68 lakh contracts.

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Put Options Data:

Maximum Put OI of 44.83 lakh contracts was seen at strike price 9,500, which will act as a crucial base for the index in August series, followed by 9,800, which now holds 41.4 lakh contracts and 9,700, which has now accumulated 34.06 lakh contracts in open interest.

Put writing was seen at strike prices 9,200 (12.26 lakh contracts added), followed by 9,600 (8.64 lakh contracts added) and 9,500, which saw an addition of 7.91 lakh contracts.

Put unwinding was seen at strike prices 9,900 (12.76 lakh contracts shed), followed by 10,000, where 4.76 lakh contracts were shed and 10,100, which saw the shedding of 1.02 lakh contracts.

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FII & DII Data:

Foreign institutional investors (FIIs) sold shares worth Rs 1,943.86 crore, while domestic institutional investors bought shares worth Rs 2,016.84 crore in the Indian equity market on Friday.

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.

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15 stocks saw long build-up

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74 stocks saw short covering:

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

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42 stocks saw short build-up:

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

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85 stocks saw long unwinding:

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

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