Trade setup for December 23: Top 15 things to know before the opening bell

Nifty Trade setup for December 23

The Nifty 50 extended its healthy rally for the second consecutive session, closing 0.8 percent higher and moving closer to the 26,200 hurdle after a gap-up opening on December 22. Momentum and technical indicators turned bullish, with the index sustaining well above the falling resistance trendline. Hence, if the index reclaims and sustains above 26,200, a move toward the record high of 26,326 cannot be ruled out in the upcoming sessions. The immediate and crucial support is placed at the 26,000 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 (26,172)

Resistance based on pivot points: 26,184, 26,216, and 26,267

Support based on pivot points: 26,083, 26,052, and 26,001

Special Formation: The Nifty 50 formed a long bullish candle on the daily charts, with a continuation of the higher high–higher low formation for another session and sustained trading above the resistance trendline. This indicates a decisive breakout of a crucial hurdle and the triangle pattern around the 26,000 level. The index traded well above all key moving averages, with short-term moving averages trending upward, and also remained above the midline of the Bollinger Bands. The RSI turned bullish and climbed to 58.56, while the MACD inched upward toward the reference line, with weakness in the histogram fading further. All these indicators point toward strengthening bullish momentum.

2) Key Levels For The Bank Nifty (59,304)

Resistance based on pivot points: 59,359, 59,410, and 59,493

Support based on pivot points: 59,195, 59,144, and 59,061

Resistance based on Fibonacci retracement: 59,449, 60,859

Support based on Fibonacci retracement: 58,983, 58,635

Special Formation: The Bank Nifty formed a bullish candle with small upper and lower shadows on the daily timeframe, indicating a continuation of its upward journey despite volatility. The index witnessed a breakout above the down-sloping resistance trendline and also climbed above the midline of the Bollinger Bands (59,300). It scaled above short-term moving averages, while the RSI (at 56.08) is on the verge of a bullish crossover. The Stochastic RSI also turned positive, while weakness in the histogram reduced further, though the MACD remained below the reference line. All these signals indicate improving momentum and a positive bias.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was seen at the 26,200 strike (with 1.05 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 26,300 strike (1 crore contracts) and 26,150 strike (84.1 lakh contracts).

Maximum Call writing was observed at the 26,150 strike, which saw an addition of 45.77 lakh contracts, followed by the 26,300 and 26,400 strikes, which added 33.24 lakh and 21.84 lakh contracts, respectively. The maximum Call unwinding was seen at the 26,000 strike, which shed 89.44 lakh contracts, followed by the 25,950 and 26,050 strikes, which shed 41.22 lakh and 28.48 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 26,100 strike holds the maximum Put open interest (with 1.69 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 (1.6 crore contracts) and the 25,900 strike (1.54 crore contracts).

The maximum Put writing was placed at the 26,100 strike, which saw an addition of 1.5 crore contracts, followed by the 26,150 and 26,050 strikes, which added 98.12 lakh and 67.62 lakh contracts, respectively. The maximum Put unwinding was seen at the 25,650 strike, which shed 22.79 lakh contracts, followed by the 25,450 and 25,550 strikes, which shed 7.2 lakh and 7.03 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the 59,500 strike holds the maximum Call open interest, with 19 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 (17.62 lakh contracts) and the 59,000 strike (8.62 lakh contracts).

Maximum Call writing was observed at the 59,400 strike (with the addition of 1.11 lakh contracts), followed by the 59,500 strike (98,140 contracts) and 60,100 strike (44,590 contracts). The maximum Call unwinding was seen at the 59,000 strike, which shed 2.59 lakh contracts, followed by the 59,100 and 59,200 strikes, which shed 1.46 lakh and 81,795 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 59,000 strike (with 14.07 lakh contracts), which can act as a key support level for the index. This was followed by the 59,500 strike (12.97 lakh contracts) and the 58,500 strike (10.41 lakh contracts).

The maximum Put writing was placed at the 59,300 strike (which added 1.56 lakh contracts), followed by the 57,500 strike (1.14 lakh contracts) and the 59,400 strike (1.04 lakh contracts). The maximum Put unwinding was seen at the 57,700 strike, which shed 37,415 contracts, followed by the 58,300 and 58,400 strikes, which shed 22,225 and 17,150 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 1.42 on December 22, compared to 1.13 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 near the lower zone, although it snapped a four-day losing streak and gained 1.6 percent to 9.67. This continues to signal a comfort zone for bulls.

10) Long Build-up (79 Stocks)

A long build-up was seen in 79 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (25 Stocks)

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

12) Short Build-up (36 Stocks)

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

13) Short-Covering (72 Stocks)

72 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