Trade Setup for Thursday: Top 10 things you should know before Opening Bell

The Nifty50 closed at a record high on Wednesday at 9,265 and formed a ‘Dragonfly Doji’ kind of pattern on the daily candlestick charts ahead of the outcome of the Reserve Bank of India’s policy meet on Thursday.

Dragonfly Doji pattern signals indecision among bulls as well as bears but it also points to the fact that buying emerged at lower levels and bulls managed to push the index towards opening which is bullish in nature and signals continuation of the trend.

Although the formation of this pattern signals a trend reversal but there is no reason for traders to go short in this market at the current juncture. But, it would be wise if investors trade with a strict stop loss placed at 9,139 for a target of 9,350, according to experts.

We have collated top ten data points on how to help you in spotting profitable trade:

Key Support & Resistance Level for Nifty:

The Nifty50 closed at a record closing high but above its crucial 5-DEMA and 10-DEMA placed at 9,204 and 9,160 respectively. According to Pivot charts, the key support level for Nifty50 is placed at 9,229, followed by 9,192 and 9,170. If the index starts to move higher then key resistance levels to watch out are 9,287, followed by 9,309, and 9,346.

Nifty Bank

Nifty Bank closed 104 points higher or 0.49 per cent at 21,652. Important Pivot level which will act as crucial support for the index is placed at 21,535, followed by 21,417, and 21,335. On the upside, the key resistance level is 21,734, followed by 21,816 and 21,934.

Call Options Data

On the options front, maximum Call open interest (OI) of 43 lakh contracts stands at strike price 9,500 which will act as a crucial resistance level for the index, followed by 9,400 which now holds 35 lakh contracts in open interest and 9,300 which has accumulated 30 lakh contracts in OI.

Call Writing was seen at strike prices 9,300 (2.6 lakh contracts added), followed by 9,400 (3.8 lakh contracts added), 9,500 (4.8 lakh contracts added), and 9600 (4.1 lakh contracts were added).

Call unwinding was seen at strike prices 8,700 (1.07 lakh contracts were shed), followed by 9,200 (0.9 lakh contracts shed), and 8,800 (0.5 lakh contracts were shed).

Put Options Data:

Maximum Put OI of 58 lakh contracts was seen at strike price 9,000 which will act as a crucial base for the index in April series followed by 9,100 which has accumulated 40 lakh contracts in open interest, and 9,200 which now holds 36 lakh contracts in open interest.

Put writing was seen at strike prices 9,000 (8.7 lakh contracts added), followed by 9,100 (6.5 lakh contracts added), 9,200 (5.5 lakh contracts added), and 9,300 (4.6 lakh contracts added).

"Option writers are writing 9,300 strike Calls and Puts which is giving the tough fight between bulls and bears at current levels and an unwinding in 9,300 Call could propel its momentum towards 9380 zone," Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told Moneycontrol.

FII & DII Data

The foreign institutional investors (FIIs) bought shares worth Rs 340 crore compared to domestic institutional investors who sold Rs 194 crore in Indian equity market.

Stocks with high Delivery%

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

90 stocks saw Long Buildup

38 stocks saw short covering

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

14 stocks saw Long Unwinding

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

50 stocks saw Short Buildup

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