Trade setup for January 13: Top 15 things to know before the opening bell

Nifty Trade Setup

The Nifty 50 extended its downtrend for the third consecutive session, falling 0.4 percent with above-average volumes on January 10. The overall trend remains bearish, given the negative bias in momentum indicators and the index trading below all key moving averages. If Friday's low (23,350) is broken, the Nifty 50 may test the November low of 23,263, followed by 23,000, which is the key support zone. However, on the upside, the 23,600-23,700 range (Friday's high and the 200-day EMA) is the key zone for bulls to get back into action, experts said.

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

1) Key Levels For The Nifty 50 (23,432)

Resistance based on pivot points: 23,554, 23,613, and 23,710

Support based on pivot points: 23,361, 23,302, and 23,205

Special Formation: The Nifty 50 reported a bearish candlestick pattern on the daily charts, with a continuation of lower highs for the sixth consecutive session. The negative sentiment persists, with the index trading below all key moving averages, including the crucial 200-day EMA, and remaining in the lower band of Bollinger bands. The momentum indicators are also not supportive, with the RSI (Relative Strength Index) at 37.8, giving a negative crossover, and the MACD staying below the zero line.

2) Key Levels For The Bank Nifty (48,734)

Resistance based on pivot points: 49,275, 49,476, and 49,801

Support based on pivot points: 48,624, 48,423, and 48,098

Resistance based on Fibonacci retracement: 50,000, 50,865

Support based on Fibonacci retracement: 47,864, 46,078

Special Formation: Technically, the Bank Nifty, with its RSI reaching 28.50, has entered the oversold zone, raising the possibility of a bounce back. However, the overall sentiment remains bearish, with the formation of a long bearish candlestick pattern on the daily charts. Additionally, the index saw lower highs for the sixth consecutive day and remained well below all key moving averages, with the 10-day EMA falling below the 200-day EMA.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was seen at the 24,500 strike (with 91.24 lakh contracts). This level can act as a key resistance for the Nifty in the short term. It was followed by the 24,000 strike (83.4 lakh contracts) and the 23,800 strike (64.96 lakh contracts).

Maximum Call writing was observed at the 24,000 strike, which saw an addition of 40.12 lakh contracts, followed by the 23,800 and 23,500 strikes, which added 30.61 lakh and 26.3 lakh contracts, respectively. There was hardly any Call unwinding seen in the 22,400-24,600 strike band.

4) Nifty Put Options Data

On the Put side, the 22,500 strike holds the maximum Put open interest (with 61.85 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 23,000 strike (45.79 lakh contracts) and the 23,500 strike (38.01 lakh contracts).

The maximum Put writing was placed at the 22,400, which saw an addition of 21.44 lakh contracts, followed by the 23,400 and 23,000 strikes, which added 15.53 lakh and 14.28 lakh contracts, respectively. The maximum Put unwinding was seen at the 23,700 strike, which shed 4.93 lakh contracts, followed by the 24,000 and 23,600 strikes, which shed 1.28 lakh and 1.05 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 51,000 strike, with 20.21 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 50,000 strike (17.5 lakh contracts) and the 50,500 strike (10.01 lakh contracts).

Maximum Call writing was visible at the 49,000 strike (with the addition of 6.65 lakh contracts), followed by the 50,000 strike (6.64 lakh contracts) and the 49,500 strike (3.78 lakh contracts). The maximum Call unwinding was seen at the 50,900 strike, which shed 3,375 contracts, followed by the 50,800 strike, which shed 420 contracts.

6) Bank Nifty Put Options Data

On the Put side, the 46,000 strike holds maximum Put open interest (with 15.03 lakh contracts), which can act as a key support level for the index. This was followed by the 49,000 strike (13 lakh contracts) and the 47,000 strike (11.9 lakh contracts).

The maximum Put writing was observed at the 45,500 strike (which added 1.89 lakh contracts), followed by the 46,500 strike (1.79 lakh contracts) and the 46,000 strike (1.39 lakh contracts). The maximum Put unwinding was seen at the 50,000 strike, which shed 88,935 contracts, followed by the 49,500 and 49,400 strikes which shed 86,085 and 72,630 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, declined to 0.88 on January 10, from 0.92 level 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 that measures expected volatility in the market, sustained above the 14 mark, rising 1.76 percent last Friday to finish at 14.92, which is unfavourable for bulls.

10) Long Build-up (20 Stocks)

A long build-up was seen in 20 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (94 Stocks)

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

12) Short Build-up (101 Stocks)

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

13) Short-Covering (13 Stocks)

13 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: Bandhan Bank, Hindustan Copper, L&T Finance, Manappuram Finance, RBL Bank

Stocks removed from F&O ban: Nil

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