Moneycontrol
Last Updated : Mar 12, 2018 07:41 AM IST | Source: Moneycontrol.com

Trade set-up for Monday: Top 15 things you should know before Opening Bell

The index is likely to remain volatile in the coming week and the pattern will be confirmed if Nifty closes in red on Monday as well. After such a steep decline there is a higher possibility of Nifty forming a base around its 200-DEMA, suggest experts.

Uttaresh Venkateshwaran @UttareshV
Sandip Das @Im_Sandip1

The Nifty started on a positive note on Friday but failed to keep the momentum going, shedding all gains to close in the red. The only respite was that it closed above its crucial 200-day exponential moving average (DEMA).

The index formed a bearish candle on the daily charts but made a Bearish Belt Hold kind of pattern on the weekly charts which suggest that the pain may not be over.

A ‘Bearish Belt Hold’ pattern is formed when the opening price for the week becomes the highest point of the week and the index declines throughout the trading week making up for the large body. The candle will either have a small or no upper shadow and small lower shadow.

On Friday, the index opened at 10,271 and rose marginally to hit an intraday high of 10,296. But bears soon took control and pushed the index towards 10,200 to hit an intraday low of 10,211. It closed 15 points lower at 10,226.85.

The index is likely to remain volatile in the coming week and the pattern will be confirmed if the Nifty closes in the red on Monday as well. After such a steep decline, there is a higher possibility of Nifty forming a base around its 200-DEMA, experts suggest.

The widely tracked Supertrend indicator also gave a sell signal on the weekly charts which suggest that bears are likely to remain in control at least in the short-term.

As the name suggests, 'Supertrend' is a trend following indicator just like Moving Averages and MACD (Moving Average Convergence Divergence). It is plotted on prices and their placement indicates the current trend. The MACD also gave a Sell signal in the previous trading session.

The Nifty index has a strong support near 10,004 levels which is its 50-DMA. It broke below its 20-DEMA on the weekly charts on Friday.

“The Nifty registered a small bearish candle after moving in a narrow range of around 80 points, but on weekly charts it witnessed a Bearish Belt Hold kind of formation suggesting intense selling pressure throughout the week,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“We have seen a lack of follow through to Thursday’s somewhat stronger up move. Friday’s price action can be attributed to the week-end factor as markets merely appear to have witnessed profit booking without intense selling pressure,” he said.

Mohammad said more directional clues will appear post Monday’s session and a positive close on the first day of the week may set the tone for extension of this pullback towards 10,450 levels.

“Unless market witness major weakness on Monday, threat of breaching recent lows of 10,140 will not be there. Hence, traders are advised to selectively look at forming long positions,” he said.

India VIX fell by 0.41% to 14.53. On the options front, maximum Put open interest stood at 10,000 followed by 10,200 strikes, while maximum Call open interest is at 10,500 followed by 10,400 strike.

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

Key support and resistance level for Nifty:

The Nifty closed at 10,226.8 on Friday. According to Pivot charts, the key support level is placed at 10,193.57, followed by 10,160.33. If the index starts to move higher, key resistance levels to watch out are 10,278.37 and 10,329.93.

Nifty Bank:

The Nifty Bank closed at 24,296.4 on Friday. The important Pivot level, which will act as crucial support for the index, is placed at 24,182.46, followed by 24,068.53. On the upside, key resistance levels are placed at 24,487.57, followed by 24,678.73.

Call Options data:

In open interest, 10,500 has seen most call writing at 55.37 lakh contracts. This could act as a crucial resistance level for the index in the March series. The second-highest build-up has taken place at 10,400, which has seen 38.36 lakh contracts, and 10,300 strike price, which has accumulated 37.71 lakh contracts.

Call writing was seen at the strike price of 10,300, which saw an addition of 3.77 lakh contracts, followed by 10,500, which added 2.96 lakh contracts, and 10,400, which added 2.02 lakh contracts.

Call unwinding was seen at the strike price 10,700, which shed 1.2 lakh contracts, followed by strike price of 10,800, which shed 0.43 lakh contracts.

Image1

Put Options data:

Maximum put open interest of 50.46 lakh contracts was seen at strike price 10,000, which will act as a crucial base for the index in March series; followed by 10,200, which now holds 39.99 lakh contracts, and 10,100, which has now accumulated 30.68 lakh contracts.

Put writing was seen at the strike price of 10,200, which saw addition of 3.39 lakh contracts, along with 9,800, which added 1.1 lakh contracts, and 10,300, which added 1.09 lakh contracts.

Put unwinding was seen at the strike price of 10,400, which shed 1.2 lakh contracts, followed by 10,000, which shed 1.05 lakh contracts.

Image2

FII & DII data:

Foreign institutional investors (FIIs) bought shares worth Rs 550.36 crore, while domestic institutional investors sold shares worth Rs 65 crore in the Indian equity market, as per provisional data available on the NSE.

Fund flow picture:

FII & DII

Stocks with high delivery percentage:

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

Image4

132 stocks saw long build-up:

Image5

17 stocks saw short covering:

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

Image6

119 stocks saw short build-up:

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

Image7

25 stocks saw long unwinding:

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

Image8

Bulk Deals:

Dhampur Sugar Mills: Mugi Constructions Pvt sold 4,72,284 shares at Rs 152.13 per share

HG Infra Engineering: Two Roads Trading Pvt bought 4,02,725 shares at Rs 267.54 per share

KSK Energy Ventures: IFCI sold 23,80,000 shares at Rs 8.78 per share

Shyam Century Ferrous: Brij Bhushan Agarwal Family Trust bought 107,00,000 shares at Rs 9.60 while Shyam Metalics and Energy sold 214,00,000shares at Rs 9.60 per share. (For more bulk deals click here)

Analyst or Board Meet/Briefings:

Bharat Forge: Carnegie Fonder, HDFC AMC, Credit Suisse, Birla Sun Life will be meeting the management of the firm on March 12-13, 2018.

Union Bank: IDFC AMC met the management of the bank on March 9, 2018.

Deepak Fertilisers: Dhunseri Investments will be meeting the management on March 12, 2018.

Stocks in news:

Bharti Airtel: RBI imposes a monetary penalty of Rs 5 crore on Airtel Payments Bank.

Tata Motors: The Group’s global wholesales in February 2018, including Jaguar Land Rover, stood at 121,252, up 18% over February 2017.

Dr Reddy's: US Food & Drug Administration issues five observations for Medak unit in Telangana.

Oriental Bank of Commerce: The bank raises one-year MCLR to 8.5% from 8.35%
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Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
First Published on Mar 12, 2018 07:30 am
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