Moneycontrol
Last Updated : Dec 06, 2018 09:19 PM IST | Source: Moneycontrol.com

Trade Setup for Friday: Top 15 things to know before Opening Bell

Jayant Manglik of Religare Broking suggests preferring hedged options trades instead of futures until market stabilises.

Sunil Shankar Matkar

Nervousness ahead of exit polls and results of five state elections and consistent global weakness spooked markets on December 6. The Nifty fell below 10,600 level and the Sensex shed over 600 points intraday. The rupee's depreciation by 43 paise against the US dollar also dented market sentiment.

The exit poll of state elections will be announced on the evening of December 7 immediately after the voting in Rajasthan and Telangana. Final results will be declared on December 11.

The cautious trend is expected to continue ahead of elections results, experts said, adding if the Nifty index closes below 10,500 in coming sessions, then there could be a further correction.

"Markets have been behaving extremely volatile for last one month and still there's no sign of slowing down, thanks to the upcoming events viz. OPEC meet and assembly elections results. Such condition poses threat mainly to the traders as they end up losing on both sides," Jayant Manglik, President, Religare Broking told Moneycontrol.

He suggests picking hedged options trades instead of futures until the market stabilises. "Nifty has breached its crucial support at 10,700 and now 10,400 would act as a cushion," he said.

The Nifty50 after a sharp gap-down opening extended losses as the day progressed and fell below 10,600 levels to hit an intraday low of 10,588.25. The index closed 181.70 points or 1.69 percent lower at 10,601.20, forming bearish candle on the daily charts.

The broader markets also saw sharp selling with the Nifty Midcap index falling 1.6 percent. All sectoral indices closed in the red.

India VIX has moved up by 5.62 percent to 19.42 levels. The VIX is not ready to cool down and its hovering at a higher band suggests restricted upside and volatile swings in the market, experts said.

"The short term trend of Nifty is down. The overall chart pattern is indicating a possibility of halting of this decline around 10,550-500 in the next 1-2 sessions," Nagaraj Shetti, Technical Research Analyst at HDFC securities said.

On the flipside, a decisive move below the support could negate the positive sentiment created by the upside bounce and could open up a broad-based weakness in the market, he added.

We have collated top 15 data points to help you spot profitable trades:

Key support and resistance level for Nifty

The Nifty closed at 10,601.15 on December 6. According to Pivot charts, the key support level is placed at 10,552.03, followed by 10,502.87. If the index starts moving upward, key resistance levels to watch out are 10,686.53 and then 10,771.87.

Nifty Bank

The Nifty Bank index closed at 26,198.30, down 321.30 points on December 6. The important Pivot level, which will act as crucial support for the index, is placed at 26,111.83, followed by 26,025.37. On the upside, key resistance levels are placed at 26,322.33, followed by 26,446.37.

Call Options Data

Maximum Call open interest (OI) of 40.98 lakh contracts was seen at the 11,000 strike price. This will act as a crucial resistance level for the December series.

This was followed by the 10,900 strike price, which now holds 23.70 lakh contracts in open interest, and 10,700, which has accumulated 20.88 lakh contracts in open interest.

Meaningful Call writing was seen at 11,000, which added 13.16 lakh contracts, followed by 10,700 strike which added 9.94 lakh contracts, and 10,900 strike which added 4.84 lakh contracts.

There was hardly any Call unwinding seen.

Image106122018

Put Options data

Maximum Put open interest of 35.99 lakh contracts was seen at the 10,200 strike price. This will act as a crucial support level for the December series.

This was followed by the 10,500 strike price, which now holds 30.55 lakh contracts in open interest, and the 10,700 strike price, which has now accumulated 26.85 lakh contracts in open interest.

Put writing was seen at the strike price of 10,300, which added 5.17 lakh contracts, followed by 10,200 strike which added 2.78 lakh contracts, and 10,400 which added 2.17 lakh contracts.

Put unwinding was seen at the strike of 10,500, which shed 5 lakh contracts, followed by 10,900 which shed 3.96 lakh contracts and 10,800 which shed 3.16 lakh contracts.

Image206122018

FII & DII data

Foreign Institutional Investors (FIIs) bought shares worth Rs 72.47 crore while Domestic Institutional Investors sold Rs 389.78 crore worth of shares in the Indian equity market on Thursday, as per provisional data available on the NSE.

Fund Flow Picture

Image806122018

Stocks with high delivery percentage

High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.

Image306122018

9 stocks saw a long buildup

Image406122018

17 stocks saw short covering

A decrease in open interest along with an increase in price mostly indicates short covering.

Image506122018

106 stocks saw a short build-up

An increase in open interest along with a decrease in price mostly indicates a build-up of short positions.

Image606122018

72 stocks saw long unwinding

Image706122018

Bulk Deals

Kajaria Ceramics: Wasatch Advisors Inc A/C Wasatch International Growth Fund bought 10,37,576 shares of the company at Rs 435.35 per share while Abu Dhabi Investment Authority sold 10,10,000 shares at Rs 435.26 per share on the NSE.

Punj Lloyd: IFCI sold 43,97,267 shares of the company at Rs 4.98 per share on the NSE.

Shubhlaxmi Jewel Art: Kanadia Fyr Fyter Private Limited sold 80,000 shares of the company at Rs 27.5 per share on the NSE.

Vikas EcoTech: Garg Vikas sold 75,00,000 shares of the company at Rs 12 per share on the NSE.

(For more bulk deals, click here)

Analyst or Board Meet/Briefings

Indo Count Industries: Company's officials will be meeting investors and analysts (participants) on December 7.

Dolphin Medical Services: 26th Annual General Meeting of the members of the company is scheduled to be held on December 29.

VIP Clothing: Company's officials will be attending conference organised by Systematix Shares & Stocks (I) Limited on December 7.

Muthoot Finance: Q2FY19 results conference will be hold on December 7.

Siyaram Silk Mills: Company will be participating in Consumer /Investor Conference on December 7 in Mumbai.

Stocks in news

NHPC: Company has been declared as the successful resolution applicant by the Committee of Creditors (CoC) of Lanco Teesta Hydro Power Limited subject to the final approval by adjudicating authority.

Khadim India: The company has issued the commercial paper for an aggregate amount of Rs 30 crore.

Cadila Healthcare and Zydus Wellness: Company entered into a share subscription agreement (SSA) with subsidiary Zydus Wellness to subscribe to 85,02,170 equity shares at an issue price of Rs 1,382 amounting to Rs 11,74,99,98,940.

Wipro: Company and Alfresco expand partnership to offer open source based digital transformation capabilities.

Sagar Cements: Consolidated cement sales increased 36.29 percent to 3,15,106 MT versus 2,31,202 MT YoY.

Punjab & Sindh Bank: Bank to consider issue of equity shares via QIP up to amount of Rs 500 crore and issue of Basel III Compliant Tier II bonds up to of Rs 1,500 crore - CNBC-TV18.

HUDCO: Board to mull raising up to Rs 1,000 crore via bonds.

Coal India: Government cuts stake in company by 2.2 percent to 72.9 percent.

IL&FS Financial Services: Company unable to service obligation of interest payment of NCDs worth Rs 52 crore due December 6 - CNBC-TV18.

Rural Electrification Corporation: Company approved JV with Maharashtra Power Utility for new projects and to sell transmission unit to Power Grid.

IL&FS Engineering and Construction Company: Bhaskar Chatterjee, Non-Executive Independent Director of the company tendered his resignation from the directorship of the company.

Nandan Denim: Vedprakash Chiripal, belonging to promoter & promoter group entities, acquired 40,000 equity shares of the company through open market on December 4.

Polycon International: Bank loan rating of the company has been revised by the rating agency, Brickwork Ratings from BB to BB- and A4+ to A4.

No stock under ban period on NSE

Securities in ban period for the next day's trade under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.

For December 7, 2018, not a single stock is present in this list.
First Published on Dec 6, 2018 08:31 pm
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