The Nifty 50 snapped its two-day winning streak and reversed all those gains, falling 0.86 percent on December 8. The index dropped below short-term moving averages and the midline of the Bollinger bands, with weakness in momentum indicators, signalling caution in the short term. Now, the crucial support lies at 25,840; if the index breaks below this level, 25,700 (50-day EMA) can't be ruled out, and there could be a negation of the large-degree higher-high–higher-low structure. On the higher side, 26,100–26,200 is expected to act as a hurdle for the index, experts said.
Here are 15 data points we have collated to help you spot profitable trades:
1) Key Levels For The Nifty 50 (25,961)
Resistance based on pivot points: 26,120, 26,188, and 26,297
Support based on pivot points: 25,901, 25,833, and 25,724
Special Formation: The Nifty 50 formed a long bearish candle with a minor lower shadow on the daily timeframe, closing below the previous day's long green candle and falling below the short-term moving averages (10 and 20-day EMAs). This came along with bearish crossovers in the RSI (51.16) and MACD. All this indicates emerging weakness and rising caution in the near term.
2) Key Levels For The Bank Nifty (59,239)
Resistance based on pivot points: 59,588, 59,749, and 60,010
Support based on pivot points: 59,067, 58,906, and 58,645
Resistance based on Fibonacci retracement: 59,440, 60,840
Support based on Fibonacci retracement: 58,995, 58,646
Special Formation: The Bank Nifty reported a bearish candle, somewhat resembling a bearish harami–type pattern (though not a classical one) on the daily charts, indicating some caution after the previous session's rally. However, the index defended the 20-day EMA and the midline of the Bollinger bands on a closing basis. The RSI declined to 56.95 with a negative crossover, while the MACD remained below the reference line with the histogram below the zero line. All this indicates a slight loss of momentum and the possibility of consolidation or further weakness.
According to the weekly options data, the maximum Call open interest was seen at the 26,200 strike (with 2.43 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 (2.31 crore contracts) and 26,000 strike (1.79 crore contracts).
Maximum Call writing was observed at the 26,100 strike, which saw an addition of 1.84 crore contracts, followed by the 26,200 and 26,000 strikes, which added 1.44 crore and 1.41 crore contracts, respectively. The maximum Call unwinding was seen at the 25,400 strike, which shed 29,475 contracts, followed by the 25,300 and 25,550 strikes, which shed 29,325 and 15,450 contracts, respectively.
On the Put side, the 25,900 strike holds the maximum Put open interest (with 1.07 crore contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 25,800 strike (93.7 lakh contracts) and the 25,500 strike (92.71 lakh contracts).
The maximum Put writing was placed at the 25,750 strike, which saw an addition of 10.53 lakh contracts, followed by the 25,700 and 25,850 strikes, which added 9.2 lakh and 6.86 lakh contracts, respectively. The maximum Put unwinding was seen at the 26,000 strike, which shed 97.66 lakh contracts, followed by the 26,100 and 26,050 strikes, which shed 72.87 lakh and 66.6 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 14.87 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 (14.28 lakh contracts) and the 61,000 strike (7.77 lakh contracts).
Maximum Call writing was observed at the 59,500 strike (with the addition of 4.1 lakh contracts), followed by the 60,000 strike (2.13 lakh contracts) and 59,600 strike (1.79 lakh contracts). The maximum Call unwinding was seen at the 58,500 strike, which shed 1.44 lakh contracts, followed by the 58,000 and 58,800 strikes, which shed 22,645 and 20,405 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 16.17 lakh contracts), which can act as a key level for the index. This was followed by the 59,000 strike (12.16 lakh contracts) and the 58,500 strike (9.97 lakh contracts).
The maximum Put writing was placed at the 58,700 strike (which added 40,950 contracts), followed by the 60,300 strike (40,565 contracts) and the 60,600 strike (15,050 contracts). The maximum Put unwinding was seen at the 60,000 strike, which shed 1.38 lakh contracts, followed by the 59,000 and 58,400 strikes, which shed 1.28 lakh and 87,185 contracts, respectively.
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, dropped to 0.64 (for the first time since October 31) on December 8, compared to 1.22 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, the fear index, spiked 7.85 percent to 11.13 after a couple of weeks of sharp decline, signalling a bit of caution for bulls. However, it remained below the 12 zone, so the bulls may not see major discomfort.
A long build-up was seen in 3 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.
11) Long Unwinding (100 Stocks)
100 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.
12) Short Build-up (108 Stocks)
108 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.
2 stocks saw short-covering, meaning a decrease in OI, along with a price increase.
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.
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, Kaynes Technology India, Sammaan Capital
Stocks removed from F&O ban: Nil
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