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Trade setup for Tuesday: Top 15 things to know before Opening Bell

Nagaraj Shetti of HDFC Securities feels the short term trend of Nifty continues to be negative.

December 07, 2021 / 12:09 AM IST

Bears maintained tight grip over Dalal Street for the second consecutive session on December 6. The market fell more than 900 points on the BSE Sensex today despite positive global cues, dented by selling across sectors amid Omicron uncertainty and caution ahead of RBI monetary policy.

The Nifty50 closed below the crucial 17,000 mark, declining 284.40 points or 1.65 percent to close at 16,912.30 and formed large bearish candle on the daily charts. The BSE Sensex was down 949.32 points or 1.65 percent at 56,747.14.

The broader markets also corrected but the quantum of fall was less than frontline indices. The Nifty Midcap 100 and Smallcap 100 indices were down 1.4 percent and 1.09 percent, respectively.

On the sectoral front, the Nifty IT was the biggest loser, falling 2.7 percent amid correction in US technology stocks. Nifty Bank, Auto, Financial Services, FMCG, Metal and Pharma indices declined 1-2 percent.

"A long bear candle was formed on the daily chart, which indicate a sharp downward reversal in the market after a decent upside bounce of last week," said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Close

He further said, "The negative chart set up like lower tops and bottoms is intact on the daily/weekly chart and the recent swing high of 17,489 could now be considered as a new lower top of the sequence. Hence, one may expect Nifty to slide down further to form a new lower bottom (below 16,782)."

He feels the short term trend of Nifty continues to be negative. However, "Any upside bounce from here could find strong resistance at 17,080 levels," Shetti said.

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

Note: The open interest (OI) and volume data of stocks given in this story are the aggregates of three-month data and not of the current month only.

Key support and resistance levels on the Nifty

According to pivot charts, the key support levels for the Nifty are placed at 16,797, followed by 16,681.8. If the index moves up, the key resistance levels to watch out for are 17,122.1 and 17,332.

Nifty Bank

The Nifty Bank plunged 461.25 points to 35,735.90 on December 6. The important pivot level, which will act as crucial support for the index, is placed at 35,506.94, followed by 35,277.97. On the upside, key resistance levels are placed at 36,154.74 and 36,573.57 levels.

Call option data

Maximum Call open interest of 34.66 lakh contracts was seen at 18000 strike, which will act as a crucial resistance level in the December series.

This is followed by 17500 strike, which holds 21.19 lakh contracts, and 17000 strike, which has accumulated 15.94 lakh contracts.

Call writing was seen at 17200 strike, which added 2.94 lakh contracts, followed by 17300 strike which added 1.6 lakh contracts, and 17500 strike which added 1.57 lakh contracts.

Call unwinding was seen at 17700 strike, which shed 1.05 lakh contracts, followed by 17900 strike which shed 83,650 contracts and 17400 strike which shed 78,700 contracts.

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Put option data

Maximum Put open interest of 47.62 lakh contracts was seen at 17000 strike. This is followed by 16000 strike, which holds 33.91 lakh contracts, and 16500 strike, which has accumulated 25.78 lakh contracts.

Put writing was seen at 16800 strike, which added 2.04 lakh contracts, followed by 16700 strike which added 1.98 lakh contracts and 16500 strike which added 1.31 lakh contracts.

Put unwinding was seen at 17400 strike, which shed 1.58 lakh contracts, followed by 17700 strike which shed 1.28 lakh contracts and 17000 strike which shed 1.02 lakh contracts.

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Stocks with a high delivery percentage

A high delivery percentage suggests that investors are showing interest in these stocks.

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3 stocks saw long build-up

An increase in open interest, along with an increase in price, mostly indicates a build-up of long positions. Based on the open interest future percentage, here are the 3 stocks in which a long build-up was seen.

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93 stocks saw long unwinding

A decline in open interest, along with a decrease in price, mostly indicates a long unwinding. Based on the open interest future percentage, here are the top 10 stocks in which long unwinding was seen.

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89 stocks saw short build-up

An increase in open interest, along with a decrease in price, mostly indicates a build-up of short positions. Based on the open interest future percentage, here are the top 10 stocks in which a short build-up was seen.

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6 stocks witnessed short-covering

A decrease in open interest, along with an increase in price, mostly indicates a short-covering. Based on the open interest future percentage, here are the 6 stocks in which short-covering was seen.

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Bulk deals

Karda Constructions: Eriska Investment Fund acquired 38 lakh equity shares in the company at Rs 16.5 per share on the, the bulk deals data showed.

LG Balakrishnan & Brothers: Promoter Rajvirdhan V sold 1.65 lakh equity shares in the company at Rs 492.97 per share on the NSE, the bulk deals data showed.

MT Educare: Axis Bank sold 9,18,033 equity shares in the company at Rs 7.77 per share on the NSE, the bulk deals data showed.

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(For more bulk deals, click here)

Analysts/Investors Meeting

Cummins India: The company's officials will meet ICICI Prudential AMC on December 7, Kotak AMC on December 8, and HDFC AMC on December 15.

Eicher Motors: The company's officials will meet Wellington Management on December 7 and Coronation Fund Managers on December 8.

Nuvoco Vistas Corporation: The company's officials will meet Myriad Asset Management, Anand Rathi Investment Services, and Quantum Mutual Fund on December 7.

Greaves Cotton: The company's officials will meet Prabhudas Lilladher on December 7, Aditya Birla Money & SBI Cap Securities on December 8, and Edelweiss and VJB Securites on December 9.

Matrimony.com: The company's officials will participate in 6th Edition of Ambit Capital's Emerging Giants Virtual Conference, 2021 on December 8.

FSN E-Commerce Ventures: The company's officials will participate in 12th Edition of India Conference hosted by Macquarie Capital Securities (India) on December 8.

Mahindra Logistics: The company's officials will participate in the Investor Conference of Edelweiss Wealth Research on December 9.

Finolex Industries: The company's officials will participate in Edelweiss Broking Meeting Conference on December 10.

Symphony: The company's officials will meet Alchemy Capital, Albatross Capital, Indgrowth Capital, KM Visaria Family Trust, Vallum Capital, Subhkam Ventures, and Valuequest Investment on December 13.

Stocks in News

GSS Infotech: The company acquired 100% of 'farm to store' company Polimeraas with a combination of stock and cash.

Rain Industries: Pabrai Investment Funds bought 2.05% stake in the company via open market transactions, increasing shareholding to 8% from 5.95% earlier.

Indo Count Industries and GHCL: Indo count acquired home textile business of GHCL for Rs 576 crore.

HFCL: The company launched its qualified institutional placement issue on December 6, and approved floor price at Rs 72.33 per share.

Suryalakshmi Cotton Mills: ICRA has upgraded the company's Long-Term rating to 'BBB-' from 'BB+' and also upgraded the short-term rating to 'A3' from 'A4+'. The ratings have been removed from 'rating watch with negative implications' and Stable outlook was assigned on the long-term rating & short term credit rating.

Tata Motors: The company announced an increase in price in the range of 2.5%, will be implemented from January 1, 2022 and will be put into effect across segments – M&HCV, I&LCV, SCV and Bus, basis individual model and variant of the vehicle.

Fund Flow

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FII and DII data

Foreign institutional investors (FIIs) net sold shares worth Rs 3,361.28 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 1,701.56 crore in the Indian equity market on December 6, as per provisional data available on the NSE.

Stocks under F&O ban on NSE

One stock - Indiabulls Housing Finance - is under the F&O ban for December 7. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Dec 6, 2021 10:42 pm
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