Trade setup for December 11: Top 15 things to know before the opening bells

Nifty Trade setup for December 11

The Nifty 50 remained under pressure for the third straight session on December 10, declining a third of a percent and sustaining below short-term moving averages. Momentum indicators also weakened further, signalling caution ahead of Federal Reserve meeting outcome due tonight. The index managed to defend the 50-day EMA (25,700) for another session, but a fall and sustained close below this level in the coming sessions could strengthen the bears and open the door for a decline toward 25,500, the key support zone. On the higher side, 25,950–26,000 is expected to act as the immediate resistance zone, according to experts.

1) Key Levels For The Nifty 50 (25,758)

Resistance based on pivot points: 25,895, 25,945, and 26,027

Support based on pivot points: 25,732, 25,682, and 25,600

Special Formation: The Nifty 50 formed a bearish candle with an upper shadow on the daily timeframe, signalling weakness and a continuation of the sell-on-rise opportunity. The index continued to trade below short-term moving averages. It approached the 50-day EMA and slipped below the lower line of the Bollinger Bands. Further, bearish crossovers persisted in the momentum indicators — RSI (44.50), MACD, and Stochastic RSI. All these factors indicate sustained bearish sentiment.

2) Key Levels For The Bank Nifty (58,960)

Resistance based on pivot points: 59,309, 59,448, and 59,672

Support based on pivot points: 58,861, 58,722, and 58,498

Resistance based on Fibonacci retracement: 59,466, 60,887

Support based on Fibonacci retracement: 58,641, 58,290

Special Formation: The Bank Nifty formed a bearish candle following the previous day’s green candle on the daily charts and fell below the 59,000 level for the first time since November 25, signalling a bearish tone. The index also moved below short-term moving averages and the midline of the Bollinger Bands on a closing basis after a long time. Weakness was also visible in the momentum indicators, with the RSI slipping to 52.2 and the MACD histogram declining further. All these indicate continued pressure on the banking index.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was placed at the 26,000 strike (with 1.31 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,900 strike (90.88 lakh contracts) and 26,100 strike (89.48 lakh contracts).

Maximum Call writing was observed at the 26,000 strike, which saw an addition of 53.34 lakh contracts, followed by the 25,900 and 26,100 strikes, which added 50.02 lakh and 31.87 lakh contracts, respectively. There was hardly any Call unwinding seen in the 25,100-26,600 strike band.

4) Nifty Put Options Data

On the Put side, the 25,500 strike holds the maximum Put open interest (with 75.84 lakh contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 25,800 strike (49.91 lakh contracts) and the 26,000 strike (43.47 lakh contracts).

The maximum Put writing was placed at the 25,500 strike, which saw an addition of 25.08 lakh contracts, followed by the 25,300 and 25,750 strikes, which added 15.43 lakh and 14.52 lakh contracts, respectively. The maximum Put unwinding was seen at the 25,400 strike, which shed 5.48 lakh contracts, followed by the 26,100 and 26,200 strikes, which shed 4.04 lakh and 1.67 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the 60,000 strike holds the maximum Call open interest, with 16.21 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 59,500 strike (14.74 lakh contracts) and the 61,000 strike (8.59 lakh contracts).

Maximum Call writing was observed at the 59,500 strike (with the addition of 1.97 lakh contracts), followed by the 60,000 strike (1.14 lakh contracts) and 59,200 strike (1.02 lakh contracts). The maximum Call unwinding was seen at the 60,700 strike, which shed 16,765 contracts, followed by the 60,400 and 61,100 strikes, which shed 15,505 and 11,340 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 59,500 strike (with 15.46 lakh contracts), which can act as a key level for the index. This was followed by the 59,000 strike (12.53 lakh contracts) and the 58,500 strike (9.58 lakh contracts).

The maximum Put writing was placed at the 57,500 strike (which added 36,540 contracts), followed by the 59,400 strike (26,390 contracts) and the 57,800 strike (15,155 contracts). The maximum Put unwinding was seen at the 59,500 strike, which shed 1.01 lakh contracts, followed by the 59,200 and 58,900 strikes, which shed 59,955 and 53,585 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell to 0.73 on December 10, compared to 0.86 in the previous session.

The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.

9) India VIX

The India VIX, also known as the fear gauge, remained favourable for the bulls, but its presence in the lower zone also suggested the possibility of sharp market moves in either direction. It was down 0.37 percent at 10.91, extending its downward trend for another session and remaining below all key moving averages.

10) Long Build-up (19 Stocks)

A long build-up was seen in 19 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (63 Stocks)

63 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.

12) Short Build-up (96 Stocks)

96 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.

13) Short-Covering (34 Stocks)

34 stocks saw short-covering, meaning a decrease in OI, along with a price increase.

14) High Delivery Trades

Here are the stocks that saw a high share of delivery trades. A high share of delivery reflects investing (as opposed to trading) interest in a stock.

15) Stocks Under F&O Ban

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.

Stocks added to F&O ban: Nil

Stocks retained in F&O ban: Bandhan Bank, Sammaan Capital

Stocks removed from F&O ban: Nil