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

The Nifty, which rose to a fresh record high in morning trade thanks to strong global cues, pared gains towards the closing of the session and formed an Inverted Hammer kind of pattern on the daily candlestick charts.

An Inverted Hammer is a reversal pattern in which the index closes near its opening levels. It has a long upper shadow, small or no lower shadow, and a small body.

The index formed an Inverted Hammer or Shooting Star kind of candle on the daily chart, which indicates that there would be a pause before prices bounce back if there is high follow-up supply in the next few trading sessions. However, it still requires confirmation.

In Monday's session, Nifty opened at 10,718 and closed at 10,741.55. It formed an intraday low of 10,713.80 and a record high of 10,782.65.

Investors are advised to watch the price action in the next couple of sessions to confirm the trend. Till then, they should remain long with a strict stop loss placed below 10,690 levels. If the index manages to stay above 10,780 then the rally could stretch towards 10,800 levels.

“The Nifty registered an Inverted Hammer kind of formation as profit booking appears to have kicked in from the highest point of the day which forced the indices to close way below its intraday high post gap up opening,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“This is clearly suggesting some sort of nervousness on the part of market participants as what appears to be a strong day ended up with the weak structure on the charts with the negative advance-decline ratio,” he said.

Hence in the immediate trading session, the index may come under pressure if it slips below 10,713 levels, whereas short weakness will be confirmed by a close below 10,690.

Mohammad further added that if the index manage to sustain above 10,782, then the rally will get extended up to around 10,870. Hence traders are advised to put a tight stop below 10,690 on a closing basis.

India VIX moved up by 4.19 percent at 14.30. VIX has to hold below 13 zones to continue with its positive and 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 10,741.5 on Monday. According to Pivot charts, the key support level is placed at 10,709.3, followed by 10,677.1. If the index starts to move higher, key resistance levels to watch out are 10,778.2 and 10,814.9.

Nifty Bank

The Nifty Bank closed at 26,069.2. Important Pivot level, which will act as crucial support for the index, is placed at 25,910.8, followed by 25,752.4. On the upside, key resistance levels are 26,159.71, followed by 26,250.2.

Call Options Data

Maximum call open interest (OI) of 47.93 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 10,800, which now holds 45.38 lakh contracts in open interest, and 10,700, which has accumulated 40.64 lakh contracts in OI.

Call writing was seen at a strike price of 10,800, which saw the addition of 9.92 lakh contracts, followed by 10,900, which saw the addition of 2.95 lakh contracts and 11,200, which saw the addition of 1.18 lakh contracts.

Call unwinding was seen at 10,600, which saw shedding of 8.45 lakh contracts, followed by 10,700 at 2.48 lakh contracts and 10,500, which saw shedding of 2.37 lakh contracts.

Put Options Data

Maximum put OI of 83.12 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 71.02 lakh contracts and 10,700 which has now accumulated 55.89 lakh contracts in open interest.

Put writing seen at 10,700, which saw the addition of 28.95 lakh contracts, followed by 8.91 lakh contracts at the strike price of 10,800 and 10,600, which saw the addition of 8.25 lakh contracts.

There was hardly any Put unwinding seen.

FII & DII Data

Foreign institutional investors (FIIs) bought shares worth Rs 32 crore, while domestic institutional investors sold shares worth Rs 173 crore in the Indian equity market on Friday, as per provisional data available on the NSE.

Fund Flow Picture:

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.

56 stocks saw long build-up:

24 stocks saw short covering:

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

103 stocks saw short build-up:

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

28 stocks saw long unwinding:

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

Bulk Deals:

(For more bulk deals click here: https://goo.gl/qrXHCH)

Adhunik Metaliks: OPG Securities Pvt. Ltd bought 7.69 lakh shares at an average price of Rs6.88.

Energy Development Company: Jain Dharmendra bought 2.55 lakh shares at an average price of Rs 32.

Jyoti Structures: E CITY HI TECH PROJECTS LLP sold 6 lakh shares at an average price of Rs 14.34.

Apollo Pipes: Canara HSBC Oriental Bank Of Commerce Life Insurance Company Ltd bought 1 lakh shares at an average price of Rs 680.

Analyst, Board Meet/Briefings:

Bajaj Allianz, Reliance PMS, Birla Sunlife, and MET Life Insurance will meet the management of PPAP Automotive between January 16 and 17, 2018.

Multiple analysts will be meeting the management of South Indian Bank between January 16 and 18, 2018.

A conference call has been invited by PC Jewellers on January 19, 2018.

Goldman Sachs is meeting the management of Endurance Technologies.

Bharti Airtel informed BSE that the board of directors of the company shall consider the declaration of interim dividend, if any, for the financial year 2017-18 in their meeting scheduled for January 18.

HDFC Bank will host an earnings call with analysts and investors at 17:30 hours (IST) on January 19, wherein the senior management of the bank will discuss the financial results with the participants.

Stocks in news:

Blue Star: Allotted 14,500 equity shares of Rs 2 each under ESOP.

Shriram Transport Finance: Fitch Affirms 'BB+' Rating

Federal Bank: Q3 net rises 26 percent to Rs 260 crore

Axis Bank: The Bank has allotted 74,150 equity shares of Rs. 2/- each on 15.01.2018, pursuant to exercise of options under its ESOP Scheme. The paid up share capital of the Bank will accordingly increase from Rs. 512,83,88,034 (256,41,94,017 equity shares of Rs. 2/- each) to Rs. 512,85,36,334 (256,42,68,167 equity shares of Rs. 2/- each).

Max Ventures

Max Ventures and Industries Ltd today said its board has approved raising Rs 450 crore by way of rights issue

IndiGrid

The Board of Sterlite Investment Managers acting as the investment manager of the trust has approved a distribution per unit of Rs 2.89 per unit for third quarter of the fiscal

Kotak Mahindra Bank

Uday Kotak's Kotak Mahindra Bank has begun discussions to divest its stake in Multi Commodity Exchange, which was dealt a blow in December when market regulator Securities and Exchange Board India paved the way for universal exchange

IOC

The pact is part of the state's concerted efforts to find sustainable solutions to paddy straw burning, which has emerged as a major environmental concern

Lupin

Lupin plans to come up with regular product launches every 3-4 months and aims to be present across all the major OTC product categories

Tech Mahindra

IT major Tech Mahindra on Monday said it has partnered with Israeli firm ContextSpace Solutions to develop the world's first global software privacy ecosystem, MyData Shield

Essar Steel

Promoters Shashi and Ravi Ruia are working toward setting up a consortium to bid for the company that’s in the midst of bankruptcy proceedings at the National Company Law Tribunal (NCLT), said several people aware of the matter

Binani Cements

Billionaires Rakesh Jhunjhunwala and D-Mart promoter Radhakishan Damani teamed up to bid for Binani Cement, two senior executives in the know of the matter said, intensifying the race for the company which is facing bankruptcy proceedings from its lenders

TCS will become a principal technology partner for Marks & Spencer as part of the deal, whose total value has not been disclosed

Life Insurance Corporation (LIC) has sold a little over 2% stake in drug and chemical firm Merck Ltd through an open market transaction

Max Ventures and Industries' board has approved raising Rs 450 crore by way of rights issue

JM Financial appoints Credit Suisse and IDFC Bank for its qualified institutional placement (QIP) offering

15 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 Capital First, Dish TV, Fortis, GMR Infra, HDIL, IFCI, Jet Airways, Jindal Steel, Jain Irrigation, JP Associates, Kaveri Seed Company, Reliance Communications, Reliance Capital, Reliance Power and Wockhardt.

22 Companies to report Q3 results on Tuesday

As many as 22 companies on the BSE are scheduled to report their results for the quarter ended December on Tuesday which includes names like Den Networks, Hatsun Agro, ICICI Lombard General Insurance, Jay Bharat Maruti, MCX, TV18 Broadcast, and Vantage Corporation Services.