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Last Updated : Sep 08, 2019 06:41 PM IST | Source: Moneycontrol.com

Trade Setup for Monday: Top 14 things to know before Opening Bell

Progress in trade talks between the US and China is expected to give a leg up to investor sentiment. The flow of foreign capital will also set the mood for the market

Nishant Kumar @Nishantopines

The positive global sentiment, amid signs of an ebb in US-China trade war, and hopes of government measures to prop up the auto sector, helped equity benchmarks Sensex and Nifty end in the green on September 6.

However, on a weekly basis, Sensex fell 0.94 percent while Nifty retreated 0.70 percent, as concerns on the deteriorating health of domestic and global economy dented investors' risk appetite.

Data released last week showed that US job growth slowed in August, while retail hiring declined for the seventh straight month.

Close

Poor sets of macroeconomic data from major economies of the world have fanned hopes of government stimulus and rate cuts by central banks.

Progress in trade talks between the US and China is expected to give a leg up to investor sentiment. The flow of foreign capital will also set the mood for the market.

"Good news on trade war front should bring respite to global and local equity carnage. Across the World, stocks are rebounding but India somehow seems to be intoxicated with domestic blues. But soon, FPIs propelled inflows will take the market higher and eventually change the sentiments. It is time to, therefore, accumulate some good quality stocks at least for the short to medium term," said Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote.

On the technical front, analysts believe the market may see the continuation of recovery for a couple of sessions if the bulls manage to push harder. In that case, the index can stretch towards 11,050-11,100.

"The plausible move on the upside will be the last leg of a potential running triangular pattern post which the Nifty can resume the larger downtrend. On the flip side, failure to sustain above 10,950 would indicate the start of the next down leg right away. A crucial trend line support on the downside is near 10,800 below which, it may test the August low at 10,637,"

said Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.

We have collated 14 data points to help you spot profitable trades:

The key support and resistance level for Nifty

The Nifty closed at 10,946.20, up 0.91 percent, on September 6. According to the pivot charts, the key support level is placed at 10,890.13, followed by 10,834.07. If the index starts moving upward, key resistance levels to watch out for are 10,979.63 and 11,013.07.

Nifty Bank

The Nifty Bank index closed at 27,247.90, up 1.22 percent on September 6. The important pivot level, which will act as crucial support for the index, is placed at 27,028.63, followed by 26,809.37. On the upside, key resistance levels are placed at 27,389.13 and 27,530.37.

VIX suggests some stability

India VIX remained flattish in the last week at 16.27, while it moved in between 15.88 to 18.31.

Volatility has been moving in a range but requires a cool down below 15-14.50 zones. VIX suggests some sort of stability and respect of support zones in the broader market.

Call options data

Maximum Call Open Interest (OI) of 21.35 lakh contracts was seen at the 11,000 strike price. It will act as a crucial resistance level for the September series.

This is followed by 11,200 strike price, which now holds 20.07 lakh contracts in open interest, and 11,300, which has accumulated 14.69 lakh contracts in open interest.

Significant Call writing was seen at the 11,200 strike price, which added 1.28 lakh contracts, followed by 11,400 strike price, which added 78,375 contracts and 11,300 strike which added 67,200 contracts.

Call Unwinding was seen at 11,100 strike price, which shed 2.75 lakh contracts, followed by 11,000 strike, which shed 2.04 lakh contracts and 10,900 strike which shed 99,750 contracts.

Chart 1

Put options data

Maximum Put Open Interest of 32.75 lakh contracts was seen at 10,800 strike price, which will act as crucial support in September series.

This is followed by 10,600 strike price, which now holds 23.14 lakh contracts in Open Interest, and 10,500 strike price, which has now accumulated 21.84 lakh contracts in open interest.

Put writing was seen at the 10,500 strike price, which added 3.86 lakh contracts, followed by 10,900 strike, which added 2.02 lakh contracts.

Put unwinding was seen at the 11,400 strike price, which shed 71,025 contracts, followed by 11,000 strike that shed 13,725 contracts and 11,200 strike price which shed 7,950 contracts.

Chart 2

Stocks with a high delivery percentage

A high delivery percentage suggests that investors are bullish on these stocks.

High delivery%

66 stocks saw a long buildup

Long Buildup

60 stocks saw short-covering

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

Short covering

29 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.

Short buildup

8 stock saw long unwinding

Long unwinding

Stocks in news:

Ruchi Soya Industries: The National Company Law Tribunal (NCLT) has approved the resolution plan submitted by Patanjali for the debt-ridden Ruchi Soya.

Reliance Communications: The company said that the 7th meeting of the Committee of Creditors of Reliance Communications is scheduled to be convened on September 9.

Kwality: The company informed that Corporate Insolvency Resolution Process (CIRP) period for it has been extended by another 60 days till November 6.

Adani Enterprises: The company incorporated Adani Lucknow International Airport on September 6.

Cholamandalam Investment and Finance Company: Rating agencies ICRA and CRISIL have assinged "ICRA A1+" and "CRISIL A1+" on the company's commercial paper for Rs 8,000 crore.

Rane Holdings: The company said ICRA has given "ICRA AA-", with "stable" outlook to its Rs 50 crore line of credit (LOC) and "ICRA A1+" to Rs 10 crore commercial paper (CP) up to November 30.

Coffee Day Enterprises: The company has announced the appointment of IDFC Securities as an advisor to identify strategic options and advise it on the refinancing of existing debt.

Varun Beverages: The company has raised Re 899.99 crore through qualified institutional placement (QIP).

FII & DII data

Foreign Institutional Investors (FIIs) sold shares worth net Rs 957.05 crore, while Domestic Institutional Investors (DIIs) bought net Rs 1,207.2 crore worth of shares in the Indian equity market on September 6, as per provisional data available on the NSE.

Bulk deals

Buld deal

(For more bulk deals, click here)

Fund Flow Picture

Fund flow

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First Published on Sep 8, 2019 06:39 pm
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