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

Nifty Trade Setup

The Nifty 50 took a breather after a significant rally, making a negative start to the week on December 16. The index closed below 24,700 but still held above the falling resistance trendline as well as above all key moving averages. Therefore, it may consolidate further in the upcoming sessions, with support at 24,500, according to experts. On the higher side, sustaining above 24,700 will be crucial for an upward move towards 25,000, while the "buy on dips" strategy remains intact.

Here are 15 data points we have collated to help you spot profitable trades:

1) Key Levels For The Nifty 50 (24,668)

Resistance based on pivot points: 24,752, 24,795, and 24,863

Support based on pivot points: 24,615, 24,573, and 24,504

Special Formation: The Nifty 50 formed a bearish candlestick pattern with upper and lower shadows on the daily timeframe, indicating volatile trade. However, the index still traded above all key moving averages and in the upper band of the Bollinger Bands. It also took support at the downward-sloping resistance trendline, but it needs to break into the upper band of the Bollinger Bands on the weekly timeframe to confirm a strong upward trend.

2) Key Levels For The Bank Nifty (53,581)

Resistance based on pivot points: 53,706, 53,801, and 53,956

Support based on pivot points: 53,397, 53,302, and 53,148

Resistance based on Fibonacci retracement: 54,467, 55,746

Support based on Fibonacci retracement: 52,914, 52,319

Special Formation: The Bank Nifty formed a small green candle with upper and lower shadows on the daily charts, indicating volatility. The index remained above all key moving averages, with a higher high-higher low formation. On the weekly scale, it traded near the upper end of the Bollinger Bands, which is a positive sign.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was seen at the 25,000 strike (with 95.23 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 (87.74 lakh contracts), and the 25,400 strike (77.33 lakh contracts).

Maximum Call writing was observed at the 24,700 strike, which saw an addition of 33.47 lakh contracts, followed by the 25,400 and 25,200 strikes, which added 28.17 lakh and 27.94 lakh contracts, respectively, while the maximum Call unwinding was seen at the 24,400 strike, which shed 1.06 lakh contracts, followed by the 24,200 and 24,000 strikes, which shed 86,075 and 77,650 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 24,000 strike hold the maximum open interest (with 83.05 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 24,500 strike (62.21 lakh contracts), and the 23,900 strike (53.14 lakh contracts).

The maximum Put writing was placed at the 24,000 strike, which saw an addition of 21.66 lakh contracts, followed by the 24,200, and 23,800 strikes, with 18.09 lakh, and 13.04 lakh contracts added, respectively, while the maximum Put unwinding was seen at the 24,400 strike, which shed 9.25 lakh contracts, followed by the 24,800 and 24,750 strikes, which shed 7.52 lakh and 4.24 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 54,000 strike, with 26.24 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 (19.66 lakh contracts) and the 53,500 strike (17.67 lakh contracts).

Maximum Call writing was visible at the 54,000 strike (with the addition of 2.34 lakh contracts), followed by the 54,500 strike (1.92 lakh contracts) and the 53,700 strike (1.74 lakh contracts), while the maximum Call unwinding was seen at the 53,000 strike, which shed 1.03 lakh contracts, followed by the 52,900 and 52,500 strikes, which shed 23,115 and 22,425 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 52,000 strike holds the maximum open interest (with 18.8 lakh contracts), which can act as a key support level for the index. This was followed by the 52,500 strike (17.62 lakh contracts) and the 53,000 strike (16.47 lakh contracts).

The maximum Put writing was observed at the 53,500 strike (which added 1.39 lakh contracts), followed by the 52,500 strike (1.28 lakh contracts) and the 52,000 strike (1.19 lakh contracts), while the maximum Put unwinding was seen at the 53,000 strike, which shed 2.53 lakh contracts, followed by the 53,100 and 52,300 strikes, which shed 50,895 and 30,045 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, dropped to 0.90 on December 16, from 1.12 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 showed a smart rebound after a decline in the previous six consecutive sessions, making bulls a bit cautious ahead of the FOMC meeting. The India VIX, the fear index, rose by 7.41 percent to the 14.02 level.

10) Long Build-up (70 Stocks)

A long build-up was seen in 70 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (31 Stocks)

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

12) Short Build-up (69 Stocks)

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

13) Short-Covering (56 Stocks)

56 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: Nil

Stocks retained in F&O ban: Granules India, Hindustan Copper, Manappuram Finance, National Aluminium Company, RBL Bank, SAIL

Stocks removed from F&O ban: Metropolis Healthcare, PVR INOX

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.

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