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Trade Setup for Monday: Top 15 things to know before Opening Bell

Investors are advised to stay cautious but if you are long the keep a stop below 10,550 levels. A slip below this level could see Nifty cracking by 1-2 percent, suggest experts.

May 21, 2018 / 08:41 AM IST

Representative image

The Nifty closed below its crucial support placed at 10,600 levels on Friday which could accelerate the selling pressure on D-Street and the next major support could come at 50-days moving average placed at 10,550-10,560.

The Nifty now trades below its key short-term moving averages such as 5-DEMA, 13-DEMA, and 20-DEMA. The index formed a bearish candle on the daily candlestick charts and a Bearish Engulfing candle on the weekly scale which indicates dominance by bears.

Investors are advised to stay cautious but if you are long the keep a stop below 10,550 levels. A slip below this level could see Nifty cracking by 1-2 percent, suggest experts.

The Nifty index opened flat but continued its losing streak for the fourth consecutive session. It opened at 10,671 and rose to an intraday high of 10,674.

Bears took control of the market in mid-morning trade and pushed the index below 10,600 levels to touch its intraday low of 10,589. The index finally closed 86 points lower at 10,596.

Close

“The Nifty registered a robust bear candle on daily charts whereas entire weekly price action resulted in a bearish engulfing formation on the weekly charts thereby strengthening the possibility of a multi-week corrective and consolidation phase,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“If the correction doesn’t end around its 50-day moving average placed around 10,550 levels then it should ideally extend by another 1-2 percent with the downside targets placed in the zone of 10,440 – 10,324 levels,” he said.

Mohammad further added that based on our wave counts, one corrective structure shall end between 10,601 – 10,550 levels and as Nifty dipped inside this critical zone traders are advised to wait for some signs of strength before initiating long positions and for this bet, a stop below 10,550 on closing basis looks to be the ideal level.

India VIX moved up by 5.54 percent at 14.15 levels. On the options front, maximum Put OI is placed at 10,500 followed by 10,600 strikes while maximum Call OI is placed at 11,000 followed by 10,800 strikes.

We have collated the top 15 data points to help you spot profitable trades:

Key support and resistance level for Nifty

The Nifty closed at 10,596.4 on Friday. According to Pivot charts, the key support level is placed at 10,565.33, followed by 10,534.27. If the index starts moving upwards, key resistance levels to watch out are 10,651.23 and 10,706.07.

Nifty Bank

The Nifty Bank index closed at 25,875.6 on Friday. The important Pivot level, which will act as crucial support for the index, is placed at 25,799.07, followed by 25,722.53. On the upside, key resistance levels are placed at 25,992.07, followed by 26,108.53.

Call Options data

In terms of open interest, the 11,000 Call option has seen the most call writing so far at 58.49 lakh contracts. This could act as a crucial resistance level for the index in the May series.

The second-highest buildup has taken place in the 10,800 Call option, which has seen 51.59 lakh contracts getting written so far. The 10,900 Call option has accumulated 34.27 lakh contracts.

Call writing was seen at the strike price of 10,600, which added 9.83 lakh contracts, followed by 10,700, which added 7.16 lakh contracts, and 10,800, which added 4.78 lakh contracts.

Call unwinding was seen at the strike price of 11,200, which shed 2.62 lakh contracts, followed by 10,900, which shed 2.58 lakh contracts.

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Put Options data

Maximum open interest in put options was seen at a strike price of 10,500, in which 53.76 lakh contracts been added till date. This could be a crucial resistance level for the index in May series.

The 10,600 put option comes next, having added 36.92 lakh contracts so far, and the 10,000 put option, which has now accumulated 34.60 lakh contracts.

During the session, put writing was seen the most at a strike price of 10,000, with 3.32 lakh contracts being added.

Put unwinding was seen at a strike price of 10,700, in which 10.86 lakh contracts were shed, followed by 10,800, which shed 5.88 lakh contracts and 10,600, which shed 5.07 lakh contracts.

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FII & DII data:

Foreign institutional investors (FIIs) sold shares worth Rs 166.15 crore, while domestic institutional investors bought shares worth Rs 149.58 crore in the Indian equity market on Friday, as per provisional data available on the NSE.

Fund flow picture:

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Stocks with high delivery percentage:

High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.

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13 stocks saw long buildup

Image31952018

13 stocks saw short covering:

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

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68 stocks saw short build-up:

An increase in open interest along with a decrease in price mostly indicates build-up of short positions.

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116 stocks saw long unwinding

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Bulk Deals:

Balrampur Chini: Morgan Stanley France sold 11.45 lakh shares at Rs 62.66.

Manali Petrochemicals: KIFS Enterprise bought 10 lakh shares at Rs 44.69 apiece.

Reliance Communications: Shaastra Securities sold 7.62 crore shares at Rs 17.19.

Sistema Shyam sold 2 crore shares at the price of Rs 15.66.

Reliance Naval: Purity Trademax traded 56.28 lakh contracts at Rs 17.

Strides Shasun: Crossland Trading traded over 6 lakh shares at Rs 419-420 apiece.

(For more bulk deals click here)

Analyst or Board Meet/Briefings:

SBI Life: The firm organised an investors’ meet on May 18,2018.

Petronet LNG: Its earnings conference call will be held on May 22, 2018.

Endurance Technologies: There is a one-on-one meeting with Wasatch Advisors on May 21, 2018.

Stocks in news:

IndusInd Bank: The lender allotted 18,900 shares of Rs 10 apiece on May 18, 2018.

Alembic Pharma: US FDA Issues Form 483 with 1 observation to Karkhadi API unit.

Ashok Leyland: The firm reported a net profit of Rs 667.4 crore.

Union Bank: Lays out plan to raise total capital funds up to Rs 7,200 crore during FY19.

Coal India: Anil Kumar Jha named as Chairman and Managing Director.

Tata Chemicals: The net profit for March quarter rose 23 percent at Rs 356 crore.

Rel Comm: The firm is filing an appeal for stay against NCLT order dated May 15.

7 stocks under ban period on NSE

Securities in ban period for the next day's trade under the F&O segment includes companies in which the security has crossed 95 percent of the market-wide position limit.

For May 21, 2018, Balrampur Chini, DHFL, Jet Airways, JP Associates, PC Jeweller, Reliance Communications, and Wockhardt are present in this list.



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Uttaresh Venkateshwaran
Sunil Matkar
first published: May 21, 2018 07:29 am
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