Moneycontrol
Jan 15, 2018 08:43 AM IST | Source: Moneycontrol.com

Trade setup for Monday: Top 15 things you should know before Opening Bell

Investors are advised to stay long on the index with a strict stop loss below 10,592 levels on closing basis. The momentum is strong and investors should not be too worried about intraday dips.

Uttaresh Venkateshwaran @UttareshV

A roller-coaster ride for investors but late buying by the bulls pushed the index to record closing high on Nifty which resulted in a ‘Dragonfly Doji’ type of pattern on the daily candlestick charts.

Bulls quickly grabbed the opportunity to buy stocks on the first opportunity they got in the trade. The index formed a bullish candle on the weekly charts.

A Dragonfly Doji pattern signals indecision among traders but it also points to the fact that bulls managed to bring the index towards the opening level. The index has to sustain above 10600 for the bullish sentiment to continue.

Investors are advised to stay long on the index with a strict stop loss below 10,592 levels on closing basis. The momentum is strong and investors should not be too worried about intraday dips.

The Nifty50 opened at 10,682.55 and closed roughly at the same level at 10,681.25. The index breached its 5-days exponential moving average to hit an intraday low of 10,597.10 but then bulls came to rescue and pushed the index back above 10,600. It hit a record high of 10,690.40 in trade today.

“The Nifty50 registered almost a ‘Dragonfly Doji kind of formation in which open, high, low remains same suggesting balance of power between bulls and bears. Usually, this kind of formation is seen at major turning points where bulls and bears try to establish their own supremacy,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“However, if we read the weekly price chart in isolation then it is looking like a consolidation breakout with a decent bullish candle. Hence, a strong follow through in next trading session shall strengthen the bullish sentiment else market will continue its insipid way of trading going forward till it breaks down,” he said.

Mohammad is of the view that for time being traders can continue their bullish bets with a stop below 10592 on a closing basis and look for a target of 10,750.

India VIX fell down by 1.98 percent at 13.73. VIX has to hold below 13-12.50 zones to support the fresh leg of the rally with a smooth ride in the market.

We have collated the top fifteen data points to help you spot profitable trade:

Key Support & Resistance Level for Nifty

The Nifty closed at 10,681.2 on Friday. According to Pivot charts, the key support level is placed at 10,622.07, followed by 10,562.93. If the index starts to move higher, key resistance levels to watch out are 10,715.37 and 10,749.53.

Nifty Bank

The Nifty Bank closed at 25,749.1. Important Pivot level, which will act as crucial support for the index, is placed at 25,612.73, followed by 25,476.37. On the upside, key resistance levels are 25,830.33, followed by 25,911.57.

Call Options Data

Maximum call open interest (OI) of 47.26 lakh contracts stands at strike price 11,000, which will act as a crucial resistance level for the index in the January series, followed by 10,700, which now holds 43.16 lakh contracts in open interest, and 10,800, which has accumulated 35.66 lakh contracts in OI.

Call writing was seen at a strike price of 11,200, which saw the addition of 2.78 lakh contracts, followed by 11,000, which saw the addition of 2.27 lakh contracts and 10,700, which saw the addition of 2.26 lakh contracts.

Call unwinding was seen at 10,600, which saw shedding of 3.26 lakh contracts, followed by 10,500 at 1.42 lakh contracts and 10,400, which saw shedding of 1.1 lakh contracts.

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Put Options Data

Maximum put OI of 82.71 lakh contracts was seen at strike price 10,500, which will act as a crucial base for the index in January series; followed by 10,600, which now holds 63.51 lakh contracts and 10,400 which has now accumulated 58.59 lakh contracts in open interest.

Put writing seen at 10,700, which saw the addition of 9.35 lakh contracts, followed by 8.45 lakh contracts at the strike price of 10,600 and 10,200, which saw the addition of 4.12 lakh contracts.

Put unwinding was seen at 3.35 lakh contracts at 10,400, followed by 10,300, which shed 1.43 lakh contracts.

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FII & DII Data

Foreign institutional investors (FIIs) sold shares worth Rs 158.16 crore, while domestic institutional investors bought shares worth Rs 696.25 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 the delivery of the stock, which means that investors are bullish on the stock.

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62 stocks saw long build-up:

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12 stocks saw short covering:

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

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100 stocks saw short build-up:

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An increase in open interest along with a decrease in price mostly indicates short positions being built up.

35 stocks saw long unwinding:

Long unwinding happens when there is a decrease in OI as well as in price.

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Bulk Deals:

Smallcap World Fund has sold over 44.6 lakh shares of Hathway Cable at Rs 40 apiece.

Adroit Financial services traded over 1 crore shares of Subex at Rs 12 apiece.

Ace investor Ashish Kacholia has purchased a little over 1.5 lakh shares of Butterfly Gandhimathi Appliances.

Bulk deals

For more bulk deals, click here

Analyst Meet/Briefings:

United Spirits announced that its results’ conference call will be held on January 23, 2018.

Alfa Accurate is meeting the management of PSP Projects on January 13, 2018.

The Board of Century Ply will be meeting on February 5, 2018.

Balyasny Asset Management met Mahindra and Mahindra on January 12, 2018.

Stocks in news:

Zenith Birla: Suresh Mitbaokar and Rasika Kadam have resigned as Directors of the company.

Infosys: The company reported a whopping 37.6 percent growth in Q3 profit, with retaining its full-year revenue guidance. Profit, which was largely driven by a tax reversal, stood at Rs 5,129 crore against Rs 3,726 crore in the previous quarter.

IDFC Bank to buy Warburg-backed Capital First in $1.5 bln stock deal

IDFC Bank will acquire Capital First Ltd in a share swap deal valued at about $1.5 billion

Shareholders in Capital First will receive 139 shares of the bank for every 10 shares held.

V Vaidyanathan will succeed Rajiv Lall as MD and CEO of the combined entity upon completion

HDFC: HDFC board has approved to raise Rs 11,301 crore by issuing 6.43 crore shares at Rs 1,726.05 per share to investors.

Telecom Stocks: The Telecom Regulatory Authority of India on Friday cut the termination charge on incoming international calls to 30 paise per minute from 53 paise.

Idea Cellular: The National Company Law Tribunal has approved the proposed merger between Idea Cellular and Vodafone -- a move that brings both the companies closer to culminating the deal.

Tata Motors: Jaguar Land Rover to recall 8,952 cars over airbag defects in China. The recall was filed by Jaguar Land Rover China to the General Administration of Quality Supervision, Inspection and Quarantine, the national quality watchdog has said.

Fortis Healthcare: Fortis, RHT Health extend discussion time by 30 days

Fortis' board had approved the proposed acquisition of entire portfolio of RHT Health Trust (RHT) for an enterprise value of around Rs 4,650 crore.

Narayana Hrudayalaya: Narayana Hrudayalaya completes acquisition of HCCI. The company earlier held 28.6 per cent stake in Health City Cayman Islands through its wholly owned subsidiary Narayana Cayman Holdings Ltd.

Shoppers Stop: Shoppers Stop allots Rs 179.26-cr shares to Amazon. According to a BSE filing by the company, it has issued of 43,95,925 equity shares of Rs 5 each at a price of Rs 407.78 per equity share, aggregating around Rs 179.26 crore, to Amazon.com NV Investment Holdings LLC.

Gayatri Projects: Societe Generale buys 25 lakh shares of Gayatri Projects. UBS FD Mgnt Switzerland AG on behalf of UBS CH EQTY FD-Emerging A bought 70,00,000 shares of Gayatri Projects at Rs 208.

Emami Paper: On January 12, 2018 Ganpati Industrial bought 9,04,000 shares of Emami Paper at Rs 226.29 on the BSE. On Friday, Emami Paper Mills ended at Rs 229.45, up Rs 8.35, or 3.78 percent on the BSE.

Hathway Cable: On January 12, 2018 Smallcap World Fund Inc sold 44,60,063 shares of Hathway Cable and Datacom at Rs 40.40 on the NSE. On Friday, Hathway Cable and Datacom ended at Rs 40.60, up Rs 0.30, or 0.74 percent on the NSE.

ING Vysya Bank: Markets regulator Sebi today imposed a penalty of Rs 4 lakh on a former official of ING Vysya Bank for disclosure lapses. The order has come following an inspection conducted by the Securities and Exchange Board of India (Sebi) of trading in the shares of ING Vysya Bank for the period from August 2011 to May 2013.

Tata Chemicals: Tata Chemicals on Friday said it has completed the sale of its urea fertilisers business to Yara Fertilisers India for Rs 2,682 crore. The deal included transfer of all assets and liabilities (working capital) of the Babrala plant in Uttar Pradesh.

Karnataka Bank: Karnataka Bank on Friday reported a 27.5 percent rise in net profit at Rs 87.38 crore for the third quarter ended December 2017 even though provision for bad loans increased.

Unitech: Embattled real estate firm Unitech on Friday sought more time to deposit Rs 750 crore in the Supreme Court but offered to deposit Rs 18 crore by next week. The Supreme Court will hear the matter on January 29.

BHEL: State-run power equipment maker BHEL today said it has commissioned a 250 MW thermal power unit at the Barauni Extension project of Bihar State Power Generation Company.

Tata Steel: Tata Steel today said its actual saleable steel output in the country during April-December of the ongoing fiscal increased by 12.4 percent to 9.24 million tonnes (MT).

SRF: SRF gets the green nod for Rs 4,800-cr expansion project in Gujarat. In a letter issued to Gurugram-headquartered SRF Ltd, the Union environment ministry said it has given the environment clearance to the company's proposed expansion project in Gujarat with some riders

Jet Airways: Expanding its probe, the Directorate of Revenue Intelligence (DRI) is looking into the role of some more crew members of Jet Airways for their alleged involvement in the smuggling of foreign currency, officials said on Sunday.

Jubilant Life: Jubilant Life gets the green nod for Rs 250 crore pesticide project. In the letter issued to Jubilant Life Sciences, the Union environment ministry has said it has given the environment clearance to the company's greenfield project with some conditions after taking into account experts' views.

Vedanta: Vedanta urges govt to resolve retrospective tax issues. Vedanta, which in 2011 bought Cairn India to enter oil business, is facing a Rs 20,495 crore tax demand that was raised using a legislation that gave the tax department powers to raise tax demand retrospectively.

Cairn India: Vedanta's oil and gas vertical Cairn India is planning to invest Rs 37,000 crore to ramp up crude production at its Barmer oil fields in Rajasthan.

Binani Cement: JSW Cement plans to increase the production capacity in West Bengal from 2.4 mtpa to 3.6 mtpa besides a captive power plant in the same location, a top company official said on Sunday.

ONGC: Six bodies including that of all the five ONGC officers and one of the two pilots of ill-fated Pawan Hans chopper, which crashed in Arabia Sea yesterday, have been recovered.

Granules India: Increase in FPIs investment limit from 24% to 49%

13 stocks under ban period on NSE

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

Securities which are banned for trading include names such as Dish TV, Fortis, GMR Infra, HDIL, Jet Airways, Jindal Steel, Jain Irrigation, JP Associates, Kaveri Seed Company, Reliance Communications, Reliance Capital, Reliance Power, and Wockhardt.
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