Trade setup for January 9: Top 15 things to know before the opening bell

Nifty Trade Setup

The Nifty 50 showed a smart recovery of nearly 200 points from the day's low and closed flat with a negative bias on January 8, taking support at the upward-sloping support trendline (which comes to around 23,500). The index finished just below 23,700 (the 200-day EMA). This seems to confirm that the index remains in the range of 23,500–24,000 levels. Any fall below the lower band could take the index towards the 23,300 zone, but sustaining above 23,700 could bring positivity and push the index towards 24,000 (which is crucial for a further strong upward rally), experts said.

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

1) Key Levels For The Nifty 50 (23,689)

Resistance based on pivot points: 23,743, 23,804, and 23,901

Support based on pivot points: 23,548, 23,488, and 23,390

Special Formation: The Nifty 50 has formed a small bearish candlestick pattern with a long lower shadow, resembling a Hammer pattern on the daily charts. This is a bullish reversal pattern formed in a downtrend, raising the possibility of an upside bounce in the upcoming sessions. However, the overall trend remains bearish, as the index traded below all key moving averages, and the momentum indicators—RSI (Relative Strength Index at 42.63)—remain in the lower band, while the MACD (Moving Average Convergence Divergence) stays below the zero line.

2) Key Levels For The Bank Nifty (49,835)

Resistance based on pivot points: 50,151, 50,354, and 50,681

Support based on pivot points: 49,497, 49,294, and 48,967

Resistance based on Fibonacci retracement: 50,455, 51,110

Support based on Fibonacci retracement: 49,276, 47,873

Special Formation: The Bank Nifty formed a bearish candlestick pattern with a sizeable lower shadow on the daily timeframe and sustained below all key moving averages, indicating weakness. The index fell by 0.73% and traded near the lower end of the Bollinger Band, but still held above the August low (49,650) on a closing basis. The momentum indicators RSI and MACD maintained a negative bias, signaling further weakness. Additionally, the index remained below the 50% Fibonacci retracement level (from the June low to the record high seen in September 2024), which also indicates a negative trend.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was seen at the 24,000 strike (with 1.33 crore contracts). This level can act as a key resistance for the Nifty in the short term. It was followed by the 24,500 strike (1.25 crore contracts) and the 24,200 strike (1.23 crore contracts).

Maximum Call writing was observed at the 23,700 strike, which saw an addition of 32.55 lakh contracts, followed by the 24,100 and 23,600 strikes, which added 27.51 lakh and 23.44 lakh contracts, respectively. The maximum Call unwinding was seen at the 24,700 strike, which shed 25.23 lakh contracts, followed by the 24,800 and 24,450 strikes, which shed 19.54 lakh and 13.23 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 23,000 strike holds the maximum Put open interest (with 1.04 crore contracts), which can act as a key support level for the Nifty. It was followed by the 23,500 strike (90.82 lakh contracts) and the 23,200 strike (71.18 lakh contracts).

The maximum Put writing was placed at the 23,400 strike, which saw an addition of 38.71 lakh contracts, followed by the 23,500 and 23,600 strikes, which added 35.02 lakh and 26.25 lakh contracts, respectively. The maximum Put unwinding was seen at the 23,200 strike, which shed 21.02 lakh contracts, followed by the 23,100 and 23,000 strikes, which shed 9.15 lakh and 6.44 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 52,000 strike, with 21.67 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 51,000 strike (16.1 lakh contracts) and the 51,500 strike (12.73 lakh contracts).

Maximum Call writing was visible at the 50,000 strike (with the addition of 3.61 lakh contracts), followed by the 51,000 strike (3.08 lakh contracts) and the 49,500 strike (1.31 lakh contracts). The maximum Call unwinding was seen at the 51,300 strike, which shed 19,770 contracts, followed by the 52,100 strike, which shed 13,305 contracts.

6) Bank Nifty Put Options Data

On the Put side, the 50,000 strike holds the maximum Put open interest (with 12.11 lakh contracts), which can act as a key level for the index. This was followed by the 49,000 strike (11.91 lakh contracts) and the 48,000 strike (11.44 lakh contracts).

The maximum Put writing was observed at the 48,600 strike (which added 1.75 lakh contracts), followed by the 49,700 strike (1.32 lakh contracts) and the 49,500 strike (93,300 contracts). The maximum Put unwinding was seen at the 50,300 strike, which shed 1.08 lakh contracts, followed by the 50,500 and 50,600 strikes which shed 36,733 and 30,945 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, increased to 0.83 on January 8, from 0.82 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, which measures market volatility, dropped by 1.33% to 14.47, extending its downtrend for another session. However, it remains above the 14 level, keeping the trend unfavourable for bulls.

10) Long Build-up (27 Stocks)

A long build-up was seen in 27 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (59 Stocks)

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

12) Short Build-up (102 Stocks)

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

13) Short-Covering (37 Stocks)

37 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: L&T Finance

Stocks retained in F&O ban: Bandhan Bank, Hindustan Copper, Manappuram Finance, RBL Bank

Stocks removed from F&O ban: Nil