Trade setup for January 5: Top 15 things to know before the opening bell

Nifty Trade setup for January 5

• The Nifty Put-Call ratio spiked to 1.46 (the highest level since September 20, 2024) on January 2, compared to 1.13 in the previous session.

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The Nifty 50 recorded a healthy run on January 2, surpassing its previous record high after a month and finishing at a new closing high with 0.7 percent gains, while broader markets also joined the rally. The bullish momentum and technical indicators remained strong. Hence, the overall mood is expected to be in favour of bulls. The index needs to decisively surpass 26,350 for a move towards 26,500–26,700. Until then, it may consolidate with range-bound trading, with the 26,100–26,000 zone acting as a key support, according to experts.

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

1) Key Levels For The Nifty 50 (26,329)

Resistance based on pivot points: 26,347, 26,399, and 26,484

Support based on pivot points: 26,178, 26,125, and 26,041

Special Formation: The Nifty 50 formed a long bullish candle after a falling resistance trendline breakout on the daily charts, with above-average volumes and a move above the upper Bollinger Bands, signalling a healthy bias in the market. The index sustained well above all key moving averages, with short-term moving averages trending upward. The RSI climbed to 62.39, the Stochastic RSI maintained a bullish crossover, and the MACD turned positive with the histogram gaining further strength. All this indicates strong bullish momentum and improving market sentiment.

2) Key Levels For The Bank Nifty (60,151)

Resistance based on pivot points: 60,209, 60,319, and 60,497

Support based on pivot points: 59,853, 59,743, and 59,565

Resistance based on Fibonacci retracement: 60,496, 60,980

Support based on Fibonacci retracement: 59,852, 59,634

Special Formation: The Bank Nifty also reported a long green candle after decisively breaking out above the 59,800 hurdle, rising 0.74 percent and hitting a new high of 60,204 with above-average volumes, indicating strong momentum. The banking index closed well above the upper Bollinger Bands, while the RSI jumped to 67.55. The MACD recorded a bullish crossover, with the histogram climbing above the zero line. All this indicates sustained strength and continued bullish dominance in the banking space.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was seen at the 27,000 strike (with 1.2 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 26,500 strike (1.16 crore contracts) and 26,600 strike (88.89 lakh contracts).

Maximum Call writing was observed at the 26,500 strike, which saw an addition of 30.36 lakh contracts, followed by the 27,000 and 26,650 strikes, which added 18.19 lakh and 13.18 lakh contracts, respectively. The maximum Call unwinding was seen at the 26,200 strike, which shed 85.82 lakh contracts, followed by the 26,150 and 26,400 strikes, which shed 45.26 lakh and 33.07 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 26,000 strike holds the maximum Put open interest (with 1.76 crore contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 26,200 strike (1.59 crore contracts) and the 26,100 strike (1.34 crore contracts).

The maximum Put writing was placed at the 26,300 strike, which saw an addition of 1.15 crore contracts, followed by the 26,200 and 26,250 strikes, which added 1.09 crore and 84.67 lakh contracts, respectively. The maximum Put unwinding was seen at the 25,750 strike, which shed 2.73 lakh contracts, followed by the 25,850 and 26,900 strikes, which shed 1.04 lakh and 10,010 contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 59,500 strike, with 14.48 lakh contracts. This can act as a key level for the index in the short term. It was followed by the 60,000 strike (12.14 lakh contracts) and the 62,000 strike (6.56 lakh contracts).

Maximum Call writing was observed at the 60,300 strike (with the addition of 85,800 contracts), followed by the 61,000 strike (77,340 contracts) and 62,000 strike (71,040 contracts). The maximum Call unwinding was seen at the 59,700 strike, which shed 87,540 contracts, followed by the 59,000 and 59,600 strikes which shed 63,900 and 53,880 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 59,500 strike holds the maximum Put open interest (with 19.11 lakh contracts), which can act as a key support level for the index. This was followed by the 60,000 strike (11.67 lakh contracts) and the 59,000 strike (11.25 lakh contracts).

The maximum Put writing was placed at the 60,000 strike (which added 4.53 lakh contracts), followed by the 59,000 strike (2.13 lakh contracts) and the 60,100 strike (1.25 lakh contracts). The maximum Put unwinding was seen at the 59,700 strike, which shed 61,650 contracts, followed by the 59,300 and 58,400 strikes, which shed 23,430 and 8,790 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, spiked to 1.46 (the highest level since September 20, 2024) on January 2, 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, which measures expected market volatility, increased 2.89 percent to 9.45 after a three-day losing streak, but continued to remain near lower levels and below all key moving averages, which remained favourable for bulls.

10) Long Build-up (93 Stocks)

A long build-up was seen in 93 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (14 Stocks)

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

12) Short Build-up (22 Stocks)

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

13) Short-Covering (80 Stocks)

80 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

Stocks removed from F&O ban: Nil