Trade setup for December 16: Top 15 things to know before the opening bells

Nifty Trade setup for December 16

The Nifty 50 snapped its two-day winning streak and finished the session marginally lower on December 15. The index sustained above all key moving averages but remained slightly below the midline of the Bollinger Bands (26,032). If the index reclaims and sustains above this level, a rally towards 26,200–26,300 cannot be ruled out in the upcoming sessions. However, until then, it may consolidate, with support placed in the 25,750–25,700 zone, according to experts.

Here are 15 data points we have collated to help you spot profitable trades:

1) Key Levels For The Nifty 50 (26,027)

Resistance based on pivot points: 26,048, 26,081, and 26,136

Support based on pivot points: 25,939, 25,905, and 25,851

Special Formation: The Nifty 50 formed a bullish candle on the daily charts, which is positive, but it could not close above the previous day’s high. The index sustained above all key moving averages but failed to close above the midline of the Bollinger Bands. The Stochastic RSI maintained a positive crossover, while the RSI slipped slightly to 53.68 and stayed marginally below the reference line. Histogram weakness faded for the third consecutive session, but the MACD remained below the reference line. All these indicators suggest consolidation with a positive bias.

2) Key Levels For The Bank Nifty (59,462)

Resistance based on pivot points: 59,533, 59,646, and 59,830

Support based on pivot points: 59,165, 59,052, and 58,868

Resistance based on Fibonacci retracement: 60,907, 62,337s

Support based on Fibonacci retracement: 58,988, 58,638

Special Formation: The Bank Nifty formed a bullish candle and closed above the downward-sloping resistance trendline, while also sustaining above all key moving averages and the midline of the Bollinger Bands, which is a positive sign. The Stochastic RSI maintained a bullish crossover, while the RSI rose to 59.18 though remained below the reference line. The weakness in the histogram faded further, though the MACD continued to stay below the reference line. All these indicators suggest improving momentum with cautious optimism.

3) Nifty Call Options Data

According to the weekly options data, the 26,200 strike holds the maximum Call open interest (with 1.42 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 26,100 strike (1.35 crore contracts) and 26,300 strike (1.1 crore contracts).

Maximum Call writing was observed at the 26,100 strike, which saw an addition of 51.95 lakh contracts, followed by the 26,200 and 26,050 strikes, which added 45.62 lakh and 36.81 lakh contracts, respectively. The maximum Call unwinding was seen at the 26,800 strike, which shed 16.36 lakh contracts, followed by the 26,600, and 26,350 strikes, which shed 13.21 lakh and 12.44 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 25,900 strike (with 1.75 crore contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 26,000 strike (1.58 crore contracts) and the 25,800 strike (1.34 crore contracts).

The maximum Put writing was placed at the 25,900 strike, which saw an addition of 60.82 lakh contracts, followed by the 25,950 and 25,850 strikes, which added 57.52 lakh and 48.28 lakh contracts, respectively. The maximum Put unwinding was seen at the 25,600 strike, which shed 7.1 lakh contracts, followed by the 25,350 and 26,100 strikes, which shed 5.73 lakh and 4.29 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 59,500 strike, with 15.38 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 60,000 strike (14.59 lakh contracts) and the 61,000 strike (8.35 lakh contracts).

Maximum Call writing was observed at the 59,500 strike (with the addition of 2.02 lakh contracts), followed by the 60,500 strike (80,080 contracts) and 59,700 strike (55,160 contracts). The maximum Call unwinding was seen at the 60,000 strike, which shed 39,235 contracts, followed by the 58,800 and 59,800 strikes, which shed 31,360 and 23,450 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 59,500 strike holds the maximum Put open interest (with 19.14 lakh contracts), which can act as a key level for the index. This was followed by the 59,000 strike (15.14 lakh contracts) and the 58,500 strike (11.15 lakh contracts).

The maximum Put writing was placed at the 59,500 strike (which added 2.28 lakh contracts), followed by the 59,000 strike (1.94 lakh contracts) and the 59,200 strike (1.01 lakh contracts). The maximum Put unwinding was seen at the 58,900 strike, which shed 6,335 contracts, followed by the 57,800 and 58,800 strikes, which shed 5,250 and 4,760 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, climbed to 1.18 on December 15, compared to 1.15 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 market volatility, edged up by 1.41 percent to 10.25 after four days of decline. However, it remained in the lower zone and below all key moving averages, signalling comfort for bulls.

10) Long Build-up (57 Stocks)

A long build-up was seen in 57 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (35 Stocks)

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

12) Short Build-up (82 Stocks)

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

13) Short-Covering (38 Stocks)

38 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

Stocks removed from F&O ban: Nil