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

The Nifty, which started on a flat note on Friday, gained momentum and reclaimed its crucial resistance level of 10,800, but last hour selling saw it close at 10,772.

The index formed a ‘Shooting Star’ kind of pattern on the daily charts and a 'hammer’ kind of pattern on the weekly scale.

A 'Shooting Star' pattern is formed when the index comes under selling pressure as traders start booking profits at higher levels. It is usually formed in an uptrend and is treated as a reversal pattern, but it would require confirmation before we can conclude that the trend will reverse in the near future.

The Nifty took support at its 13-day exponential moving average (EMA) and bounced back to close at 10,772 levels. It hit an intraday low of 10,735 and an intraday high of 10,816.35.

Investors are advised to remain cautious till the time a clear trend emerges. For a decisive breakout to happen, the index has to close above 10,930. On the downside, 10,600 is crucial support, a breach of which could extend the selling pressure.

“The Nifty registered a Shooting Star kind of formation as once again it witnessed mild profit-booking from the day’s high of 10,816. It failed to negotiate the resistance point of the down sloping trend line, which is in progress from the highs of 11,171 with multiple touchpoints,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, chartviewindia.in, said.

“Hence, with the passage of time, it becomes very critical for the bulls to register a breakout above the said trend line to usher in a bigger upswing. Unless that happens, the threat of moving towards the lower end of the trading range around 10,600 still looms large,” he stated.

However, technical experts said the price behaviour on the weekly charts throughout the current consolidation phase of around 8 weeks suggests that intra-week dips are getting bought into as happened on multiple occasions in this consolidation zone of 10,900–10,550 levels.

Mohammad added that even from an Elliot Wave perspective, if a contracting triangle is in progress from the highs of 10,930, the market should be under mild pressure for a couple of trading sessions as it culminates the last leg (Wave E) of this corrective structure and should register a higher bottom above 10,560 levels, which should ultimately pave the way for a big breakout.

India VIX fell down 1.11 percent to 12.45. It has been falling down for the last four trading sessions. Lower volatility indicates limited downside in the market till it remains below 13.50 zones.

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

Key support and resistance level for the Nifty
The Nifty ended Friday at 10,772.7. According to Pivot charts, its key support level is placed at 10,733.03, followed by 10,693.37. If the index starts moving upwards, the key resistance levels to watch out are 10,814.33 and 10,855.97.

Nifty Bank
The Nifty Bank index closed at 26,493.8. The important Pivot level, which will act as crucial support for the index, is placed at 26,399.27, followed by 26,304.73. On the upside, key resistance levels are placed at 26,599.07, followed by 26,704.33.

Call Options data
In terms of open interest, the 10,800 call option has seen the most call writing so far at 37.66 lakh contracts. This could act as crucial resistance level for the index in the July series.

The second-highest build-up has taken place in the 11,000 call option, which has seen 35.12 lakh contracts getting added so far. The 10,900 call option has accumulated 30.46 lakh contracts.

Call writing was seen at the strike price of 10,800, which shed 3.50 lakh contracts, followed by 11,300, which added 1.82 lakh contracts, and 11,100, which added 1.27 lakh contracts.

Call unwinding was seen at the strike price of 11,000, which shed 71,550 contracts, followed by 10,700, which shed over 67,000 contracts, and 10,600, which shed 66,000 contracts.

Put options data
Maximum open interest in put options was seen at 10,600 strike price, in which 51.21 lakh contracts have been added till date. This could be a crucial resistance level for the index in July series.

The 10,700 put option comes next, having added 35.68 lakh contracts so far, and the 10,500 put option, which has now accumulated 34.82 lakh contracts.

Put writing was seen at the strike price of 10,700, which added 5.46 lakh contracts, followed by 10,800, which added 4.62 lakh contracts, and 10,400, which added 3.66 lakh contracts.

There was hardly any put unwinding seen.

FII & DII data
Foreign institutional investors (FIIs) sold shares worth Rs 968.18 crore, while domestic institutional investors bought shares worth Rs 1,480.82 crore in the Indian equity market, as per provisional data available on the NSE.

Fund flow picture
:

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.

59 stocks saw long build-up

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

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

20 stocks saw long unwinding

Bulk deals
Indian Metals: Navy Stock Consultant traded over 1 lakh shares at Rs 372-373 apiece.

Uttam Value Steels: Metal Industrial sold 6.25 crore shares at Rs 0.10 apiece.

Varroc Engineering: TNTBC as trustee of Nomura India bought 11 lakh shares at Rs 1,027.69 apiece.

(For more bulk deals click here)

Analyst or board meet/briefings
BN Rathi Securities: Company’s representatives will be meeting on August 9, 2018 to discuss amalgamation.

Prism Johnson: The company met multiple investors on July 6.

Kalpataru Power: The company will be meeting IDFC AMC on July 9.

Stocks in focus
Trigyn Tech: The firm has bagged an order from Nashik Municipal Smart City Development.

Tata Steel Production & Sales Figures: Q1 FY19 India production at 3.17 million tonne

Fortis Healthcare: The company has released audited financial results with qualifications from auditor: Deloitte.

Cadila: Zydus has received tentative approval from US Food & Drug Administration for Deferasirox tablets for oral suspension. It is used to treat high levels of iron in the body.

Cyient: The company allotted 26,780 shares to its associates under the ASOP scheme.

Emami: The company will be conducting its annual general meeting on August 1.

ENIL: The company has commenced broadcast from a new radio station at Siliguri.

DCB Bank: The lender's board will be meeting on July 14 to discuss financial results.

Srei Equipment: CARE upgrades Srei Equipment Fin long-term rating to AA; outlook positive

Ashok Leyland plans to scale up LCV biz, international operations

1 stock under ban period on NSESecurity 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 July 9, IDBI is only stock present in this list.