Trade setup for December 12: Top 15 things to know before the opening bells

Nifty Trade setup for December 12

The benchmark Nifty 50 snapped its three-day losing streak, rising nearly six-tenths of a percent on December 11; however, it could not close above the previous day’s high and the short-term moving averages (aligned at 25,950). For the upside to continue from here, the index needs to surpass and sustain above the 25,950–26,000 zone to move upward toward 26,200–26,300 levels. Until then, it may consolidate, with immediate support at 25,700, followed by 25,500 as a crucial support level, experts said.

1) Key Levels For The Nifty 50 (25,899)

Resistance based on pivot points: 25,926, 25,980, and 26,068

Support based on pivot points: 25,750, 25,696, and 25,609

Special Formation: The Nifty 50 formed a bullish candle with a lower shadow on the daily charts, indicating a positive trend and buying interest at lower levels. The index still remained below the short-term moving averages and the midline of the Bollinger Bands. The RSI rose to 49.62, but was still below the reference line. The MACD also remained below the reference line, though the weak momentum in the histogram faded. The Stochastic RSI is on the verge of a bullish breakout in the lower zone. All this indicates early signs of positive momentum building, though confirmation is still needed.

2) Key Levels For The Bank Nifty (59,210)

Resistance based on pivot points: 59,383, 59,530, and 59,768

Support based on pivot points: 58,906, 58,759, and 58,521

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

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

Special Formation: The Bank Nifty also formed a green candle with upper and lower shadows on the daily timeframe, and it almost recovered the previous day’s losses with a 0.42 percent gain, indicating a positive trend amid volatility. The index climbed above the 20-day EMA but remained below the 10-day EMA and the midline of the Bollinger Bands. The RSI increased to 55.78 but could not surpass the reference line. The MACD maintained its bearish crossover with continued weakness in the histogram. All this indicates a mildly positive bias, but with caution as momentum signals remain mixed.

3) Nifty Call Options Data

According to the weekly options data, the 26,000 strike holds the maximum Call open interest (with 1.06 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 26,500 strike (1.03 crore contracts) and 26,100 strike (1.02 crore contracts).

Maximum Call writing was observed at the 26,350 strike, which saw an addition of 16.29 lakh contracts, followed by the 26,500 and 26,250 strikes, which added 15.55 lakh and 15.07 lakh contracts, respectively. The maximum Call unwinding was seen at the 25,800 strike, which shed 27.33 lakh contracts, followed by the 26,000, and 25,850 strikes, which shed 24.9 lakh contracts each.

4) Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 25,800 strike (with 95.17 lakh contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 25,700 strike (95.15 lakh contracts) and the 25,500 strike (75.57 lakh contracts).

The maximum Put writing was placed at the 25,700 strike, which saw an addition of 57.2 lakh contracts, followed by the 25,800 and 25,900 strikes, which added 45.25 lakh and 34.68 lakh contracts, respectively. The maximum Put unwinding was seen at the 26,300 strike, which shed 5 lakh contracts, followed by the 26,200 and 26,500 strikes, which shed 2.94 lakh and 98,250 contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 60,000 strike, with 14.14 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 (13.85 lakh contracts) and the 61,000 strike (7.96 lakh contracts).

Maximum Call writing was observed at the 58,000 strike (with the addition of 23,625 contracts), followed by the 60,100 strike (16,380 contracts) and 61,400 strike (15,050 contracts). The maximum Call unwinding was seen at the 60,000 strike, which shed 2.06 lakh contracts, followed by the 59,000 and 59,500 strikes, which shed 1.02 lakh and 88,970 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 59,500 strike holds the maximum Put open interest (with 16.2 lakh contracts), which can act as a key level for the index. This was followed by the 59,000 strike (12.54 lakh contracts) and the 58,500 strike (9.54 lakh contracts).

The maximum Put writing was placed at the 59,500 strike (which added 74,200 contracts), followed by the 59,200 strike (54,670 contracts) and the 58,900 strike (46,025 contracts). The maximum Put unwinding was seen at the 59,400 strike, which shed 34,895 contracts, followed by the 59,900 and 60,300 strikes, which shed 20,230 and 15,680 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, rose to 0.94 on December 11, compared to 0.73 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, which measures expected market volatility, continued to provide comfort for the bulls, but being at a lower zone also increased the possibility of a sharp market move on either side. The VIX dropped 4.7 percent to 10.4, extending its downtrend for the third straight session.

10) Long Build-up (83 Stocks)

A long build-up was seen in 83 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (8 Stocks)

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

12) Short Build-up (18 Stocks)

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

13) Short-Covering (103 Stocks)

103 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