Trade setup for January 12: Top 15 things to know before the opening bell

Nifty Trade setup for January 12

• Momentum indicators signal bearishness
• Bears likely to maintain the upper hand
• Sustaining Nifty below 25,700 could open door for a decline towards 25,600
• Above 25,700, 25,900–26,000 are levels to watch

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The Nifty 50 appeared to be caught in a bear trap as it witnessed a downtrend throughout last week ending January 9, with major selling pressure seen in the final two sessions. Momentum indicators signalled bearishness. Hence, experts expect bears to maintain the upper hand, with the possibility of further consolidation over the next few sessions. Sustaining below 25,700 could open the door for a decline towards 25,600, the immediate support, followed by crucial support levels at 25,450 and 25,300. However, on the upside, if the index reclaims and sustains above 25,700, the 25,900–26,000 zone will be the key area to watch.

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

1) Key Levels For The Nifty 50 (25,683)

Resistance based on pivot points: 25,870, 25,945, and 26,067

Support based on pivot points: 25,628, 25,553, and 25,431

Special Formation: The Nifty 50 formed a long bearish candle with minor upper and lower shadows on the daily charts, accompanied by above-average volumes, indicating a continuation of the downtrend amid heightened volatility. The index fell below short- and medium-term moving averages and approached the 100-day EMA, while also trading below the lower Bollinger Bands. Momentum indicators signalled a bearish trend, with the RSI falling to 38.55 and the MACD turning negative as the histogram continued to decline. All these factors indicate sustained selling pressure and a weak short-term outlook.

2) Key Levels For The Bank Nifty (59,252)

Resistance based on pivot points: 59,605, 59,744, and 59,967

Support based on pivot points: 59,158, 59,020, and 58,796

Resistance based on Fibonacci retracement: 59,795, 59,950

Support based on Fibonacci retracement: 59,082, 58,712

Special Formation: The Bank Nifty also formed a red candle with minor upper and lower shadows on the daily timeframe and slipped below the 20-day EMA as well as the midline of the Bollinger Bands, signalling that bears are gradually gaining strength. The index declined 0.73 percent amid high volumes. The RSI dropped to 47.96, while the MACD slipped below the reference line, with the histogram falling below the zero line. All these indicators suggest increasing bearish momentum.

3) Nifty Call Options Data

According to the weekly options data, the 26,000 strike holds the maximum Call open interest (with 2.05 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 26,200 strike (1.53 crore contracts) and 26,100 strike (1.52 crore contracts).

Maximum Call writing was observed at the 25,800 strike, which saw an addition of 80.6 lakh contracts, followed by the 26,000 and 25,900 strikes, which added 66.59 lakh and 64.86 lakh contracts, respectively. The maximum Call unwinding was seen at the 26,450 strike, which shed 28.99 lakh contracts, followed by the 26,200 and 26,400 strikes, which shed 22.65 lakh and 17.3 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 25,500 strike (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 25,600 strike (74.4 lakh contracts) and the 25,400 strike (74.37 lakh contracts).

The maximum Put writing was placed at the 25,400 strike, which saw an addition of 42.17 lakh contracts, followed by the 25,200 and 25,650 strikes, which added 35.74 lakh and 23.01 lakh contracts, respectively. The maximum Put unwinding was seen at the 25,800 strike, which shed 30.39 lakh contracts, followed by the 25,900 and 26,100 strikes, which shed 20.28 lakh and 16.15 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 16.46 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 (15.98 lakh contracts) and the 61,000 strike (7.84 lakh contracts).

Maximum Call writing was observed at the 59,500 strike (with the addition of 1.99 lakh contracts), followed by the 60,000 strike (1.78 lakh contracts) and 61,000 strike (1.02 lakh contracts). The maximum Call unwinding was seen at the 61,500 strike, which shed 48,960 contracts, followed by the 60,400 and 61,400 strikes which shed 12,300 and 5,460 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 18.55 lakh contracts), which can act as a key level for the index. This was followed by the 59,000 strike (9.26 lakh contracts) and the 60,000 strike (8.75 lakh contracts).

The maximum Put writing was placed at the 58,000 strike (which added 1.06 lakh contracts), followed by the 59,200 strike (39,330 contracts) and the 58,100 strike (37,950 contracts). The maximum Put unwinding was seen at the 60,000 strike, which shed 1.66 lakh contracts, followed by the 59,000 and 59,900 strikes, which shed 1.35 lakh and 75,840 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, slipped to 0.62 on January 9 (the lowest closing level since December 18, 2024), compared to 0.66 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, continued to rise for the second straight session and moved closer to its 100-day EMA, closing 3.07 percent higher at 10.93. This marked its highest closing level since December 9 and signalled caution for bulls.

10) Long Build-up (19 Stocks)

A long build-up was seen in 19 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (66 Stocks)

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

12) Short Build-up (94 Stocks)

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

13) Short-Covering (33 Stocks)

33 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: SAIL, Sammaan Capital

Stocks removed from F&O ban: Nil