Trade Setup for Today: 15 Things to Know Before the Opening Bell

108 stocks saw short-covering in yesterday's trade, indicated by a decrease in OI along with a price increase.

Stocks saw a sharp recovery on June 5, ending higher as coalition NDA moved forward to form government. After significant losses the previous day, Nifty regained strength and ended higher by 735 points near 22,600, with volatility declining sharply.

Experts suggest that the index will find support around the recent low of 21,800 levels, and a decisive breach above the 22,900 zone would further improve market sentiment.

Here are 15 key data points to help you spot profitable trades:

1. Key Levels for the Nifty 50

Supports based on pivot points: 18,319.05, 20,217.1, and 21,050.8
Resistance based on pivot points: 22,115.15, 22,948.85, 24,013.2, and 25,911.25

2. Special Formation: Technically, the index has crossed the hurdle of the 100-Day Exponential Moving Average (100-DEMA) and formed an insider bar candlestick pattern on a daily scale.

3. Key Levels for the Bank Nifty
Resistance based on pivot points: 49,704.48, 52,480.37, and 57,069.57
Support based on pivot points: 45,115.28, 43,301.97, and 38,712.77

4. Special Formation: The index has crossed the 100-DEMA and formed an insider bar candlestick pattern on a daily scale. The 100-DEMA is near 48,500 levels.

5. Nifty Call Options Data: According to weekly options data, the 23,000 strike (with 1.95 crore combined OI) had the maximum Call open interest, acting as a key resistance level for the Nifty in the short term. This was followed by the 22,800 strike (54.80 lakh combined OI) and the 22,500 strike (74.33 lakh combined OI). Call writers exiting and additional put writing were observed at strikes from 21,500 to 22,200, leading to a sharp recovery in Nifty on June 5.

6. Nifty Put Options Data: On the Put side, the maximum open interest was at the 22,500 strike (with 85 lakh combined OI), acting as a key support level for the Nifty. This was followed by the 22,200 strike with 36 lakh combined OI.

7. FII Funds Flow (Rs crore):

8. Put-Call Ratio: The Nifty Put-Call ratio (PCR), indicating market sentiment, improved moderately to 0.75 on June 4 from 0.73 in the previous session. An increasing PCR above 0.7 or surpassing 1 generally indicates bullish sentiment, while a ratio below 0.7 or moving towards 0.5 indicates a bearish mood.

9. Nifty Max Pain Point: The Nifty max pain point remains at the 22,500 strike price.

10. India VIX: Volatility increased sharply because of election results, putting bulls in an uncomfortable position. However, post election results, India VIX - the fear index - saw a sharp fall of 23 percent, closing at 18.88 level.

11. Long Build-up (76 Stocks): A long build-up was seen in 76 stocks, indicated by an increase in open interest (OI) and price.

12. Long Unwinding (0 Stocks): None of the stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.

13. Short Build-up (0 Stocks): None of the stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.

14. Short-Covering (108 Stocks): 108 stocks saw short-covering, indicated by a decrease in OI along with a price increase.

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: None
Stocks retained in F&O ban: Zee Entertainment Enterprises
Stocks removed from F&O ban: None

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.