Trade setup for December 2: Top 15 things to know before the opening bells

Nifty Trade setup for December 2

The Nifty 50 continued to consolidate for the third consecutive session, erasing 150 points from its fresh record high of 26,326 on profit booking, and closing 0.1 percent down on December 1. The momentum indicators also signaled some caution for the short term, but overall, the trend still favors the bulls, with the continuation of a higher high-higher low formation on larger degree timeframes. According to experts, the index may consolidate further with support at 26,100-26,000, followed by 25,900 as a crucial support level. On the higher side, 26,300 is expected to act as a key resistance zone, as a decisive close above it could open the door for a sharp upmove.

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

1) Key Levels For The Nifty 50 (26,176)

Resistance based on pivot points: 26,286, 26,286, and 26,410

Support based on pivot points: 26,132, 26,084, and 26,007

Special Formation: The Nifty 50 formed a long bearish candle with a minor lower shadow on the daily charts, signaling pressure despite some buying interest at lower levels. The index has still sustained above all key moving averages, maintaining the higher high-higher low structure on larger timeframes. However, the RSI (at 61.66) and the Stochastic RSI turned bearish, while the MACD inclined downward but stayed above the reference line. The histogram signaled some fading momentum, but it is still above the zero line. All of this indicates caution in the short term, though the overall trend remains bullish.

2) Key Levels For The Bank Nifty (59,681)

Resistance based on pivot points: 59,999, 60,137, and 60,361

Support based on pivot points: 59,550, 59,412, and 59,188

Resistance based on Fibonacci retracement: 60,875, 62,294

Support based on Fibonacci retracement: 59,416, 58,985

Special Formation: The Bank Nifty reported a bearish candle on Monday after a Doji pattern formation in the previous session but stayed well above 59,500. The index witnessed profit booking at the upper Bollinger Bands, which was expected after its record high journey. As long as the index stays above the short- and medium-term moving averages, as well as the midline of the Bollinger Bands, the bulls will maintain control, despite intermittent consolidation. The momentum indicators still show a bullish bias. All of this indicates continued bullishness in the medium term.

3) Nifty Call Options Data

According to the weekly options data, the 26,300 strike holds the maximum Call open interest (with 2.26 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 (1.68 crore contracts) and 26,200 strike (1.57 crore contracts).

Maximum Call writing was observed at the 26,300 strike, which saw an addition of 1.04 crore contracts, followed by the 26,200 and 26,250 strikes, which added 75.93 lakh and 53.74 lakh contracts, respectively. The maximum Call unwinding was seen at the 26,000 strike, which shed 7.16 lakh contracts, followed by the 27,100 and 25,900 strikes, which shed 6.45 lakh and 1.93 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 26,000 strike (with 1.59 crore contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 26,100 strike (1.12 crore contracts) and the 26,200 strike (94.5 lakh contracts).

The maximum Put writing was placed at the 26,150 strike, which saw an addition of 19.44 lakh contracts, followed by the 26,050 and 25,850 strikes, which added 10.28 lakh and 4.95 lakh contracts, respectively. The maximum Put unwinding was seen at the 26,200 strike, which shed 14.98 lakh contracts, followed by the 26,250 and 26,000 strikes, which shed 13.65 lakh and 10.95 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 58,500 strike, with 12.88 lakh contracts. This can act as a key level for the index in the short term. It was followed by the 60,000 strike (12.61 lakh contracts) and the 61,000 strike (6.48 lakh contracts).

Maximum Call writing was observed at the 60,000 strike (with the addition of 1.76 lakh contracts), followed by the 61,000 strike (98,630 contracts) and 60,500 strike (80,815 contracts). The maximum Call unwinding was seen at the 59,500 strike, which shed 40,425 contracts, followed by the 59,100 and 59,000 strikes, which shed 31,640 and 26,705 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 58,500 strike holds the maximum Put open interest (with 21.12 lakh contracts), which can act as a key support level for the index. This was followed by the 59,000 strike (12.32 lakh contracts) and the 58,000 strike (8.3 lakh contracts).

The maximum Put writing was placed at the 58,400 strike (which added 1.02 lakh contracts), followed by the 60,000 strike (94,535 contracts) and the 60,300 strike (67,655 contracts). The maximum Put unwinding was seen at the 58,200 strike, which shed 92,190 contracts, followed by the 59,000 and 59,800 strikes, which shed 65,345 and 57,575 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, dropped to 0.89 on December 1, compared to 1.14 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, snapped a five-day losing streak but still held below the 12 zone and beneath all key moving averages, providing comfort for bulls. It closed at 11.63, up 0.06 percent.

10) Long Build-up (50 Stocks)

A long build-up was seen in 50 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (36 Stocks)

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

12) Short Build-up (89 Stocks)

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

13) Short-Covering (36 Stocks)

36 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: Sammaan Capital

Stocks removed from F&O ban: Nil