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

Nifty Trade Setup

The benchmark Nifty 50 rallied nearly 1 percent after falling 1.5 percent intraday on December 13, closing above the 20-week SMA (Simple Moving Average) and a downward-sloping resistance trendline. Additionally, there was a breakout from a five-day consolidation, which is positive. Hence, as long as the index holds 24,700, a further rally towards the psychological level of 25,000 cannot be ruled out. However, if it sustains below this level, 24,500 can act as immediate support, experts said.

1) Key Levels For The Nifty 50 (24,768)

Resistance based on pivot points: 24,814, 24,958, and 25,192

Support based on pivot points: 24,347, 24,203, and 23,969

Special Formation: The Nifty 50 formed a bullish candlestick pattern with a long lower shadow on the daily charts, indicating strong buying interest from lower levels after taking support around the mid-range of the Bollinger Bands intraday. The index stayed above all key moving averages on both the daily and weekly timeframes, which is a positive sign. Momentum indicators, such as the RSI (Relative Strength Index at 60.37) and MACD (Moving Average Convergence Divergence) above the zero line, showed an upward bias.

2) Key Levels For The Bank Nifty (53,584)

Resistance based on pivot points: 53,698, 54,026, and 54,557

Support based on pivot points: 52,637, 52,309, and 51,742

Resistance based on Fibonacci retracement: 54,467, 55,748

Support based on Fibonacci retracement: 52,921, 52,326

Special Formation: The Bank Nifty also formed a bullish candlestick pattern with a long lower shadow on the daily timeframe, indicating healthy buying interest at lower levels. The banking index also took support at the mid-range of the Bollinger Bands intraday and climbed above all key moving averages. On the weekly scale, it sustained in the upper band of the Bollinger Bands, which is a positive sign. The index was up 0.7 percent on Friday and 0.14 percent for the week.

3) Nifty Call Options Data

According to the weekly options data, the 25,000 strike holds the maximum Call open interest (with 67.91 lakh contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,500 strike (60.54 lakh contracts), and the 25,100 strike (51.47 lakh contracts).

Maximum Call writing was observed at the 25,100 strike, which saw an addition of 26.76 lakh contracts, followed by the 24,800 and 25,000 strikes, which added 19.88 lakh and 19.5 lakh contracts, respectively, while the maximum Call unwinding was seen at the 24,600 strike, which shed 12.81 lakh contracts, followed by the 24,900 and 24,550 strikes, which shed 3.91 lakh and 66,275 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 24,500 strike (with 62.06 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 24,000 strike (61.38 lakh contracts), and the 24,400 strike (46.38 lakh contracts).

The maximum Put writing was placed at the 24,500 strike, which saw an addition of 33.22 lakh contracts, followed by the 24,000, and 24,400 strikes, with 31.3 lakh, and 30.82 lakh contracts added, respectively, while there was hardly any Put unwinding seen.

5) Bank Nifty Call Options Data

According to the monthly options data, the 54,000 strike holds the maximum Call open interest, with 23.89 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 55,000 strike (18.79 lakh contracts) and the 53,500 strike (16.81 lakh contracts).

Maximum Call writing was visible at the 53,000 strike (with the addition of 2.64 lakh contracts), followed by the 52,600 strike (1.63 lakh contracts) and the 52,700 strike (1.19 lakh contracts), while the maximum Call unwinding was seen at the 54,500 strike, which shed 2.9 lakh contracts, followed by the 53,500 and 53,600 strikes, which shed 2.78 lakh and 2.07 lakh contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 53,000 (with 19 lakh contracts), which can act as a key support level for the index. This was followed by the 52,000 strike (17.61 lakh contracts) and the 52,500 strike (16.34 lakh contracts).

The maximum Put writing was observed at the 53,000 strike (which added 4.92 lakh contracts), followed by the 53,100 strike (1.01 lakh contracts) and the 52,700 strike (66,915 contracts), while the maximum Put unwinding was seen at the 53,500 strike, which shed 3.01 lakh contracts, followed by the 52,500 and 52,000 strikes, which shed 1.3 lakh and 1.02 lakh contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, climbed to 1.12 on December 13, from 1.02 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

Volatility declined for the sixth consecutive session, making the trend more favourable for bulls. The India VIX, the fear index, was down by 1.04 percent at 13.05 on Friday, while for the week, it declined 7.69 percent.

10) Long Build-up (57 Stocks)

A long build-up was seen in 57 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (48 Stocks)

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

12) Short Build-up (59 Stocks)

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

13) Short-Covering (62 Stocks)

62 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: Manappuram Finance, SAIL

Stocks retained in F&O ban: Granules India, Hindustan Copper, Metropolis Healthcare, National Aluminium Company, PVR INOX, RBL Bank

Stocks removed from F&O ban: Nil