Moneycontrol
Last Updated : Jan 10, 2018 08:06 AM IST | Source: Moneycontrol.com

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

Investors are advised to stay long but tread with caution because the index is trading near key resistance levels.


Bulls powered D-Street to yet another record high for the third straight day in a row on Tuesday. The index witnessed some profit booking but recouped initial losses to close near day’s high making a Doji pattern on the daily charts.

A 'Doji' is formed when the index opens and then closes approximately around the same level but remain volatile throughout the day which is indicated by its long shadows on either side. The body will be insignificant which will appear like a plus sign on the charts.

The Nifty index continued its formation of higher highs and higher lows for fifth consecutive sessions and registered a fresh lifetime high of 10659 zones.

The Nifty, which opened at 10,645.10, rose to a record high of 10,659.15 but bears quickly took control and pushed the index towards 10,603 which made a long lower shadow on the daily charts.

The bulls took control and pushed the index towards its record high. The Nifty finally closed 13 points higher at 10,637.00, a fresh record closing high.

Investors are advised to stay long but tread with caution because the index is trading near key resistance levels. Analysts advise traders to keep a strict stop loss below 10,600 on a closing basis as this rally can falter going into the budget at any point in time.

“The Nifty registered a Doji kind of indecisive formation suggesting that traders are clueless at higher levels about further direction as the market remained range-bound throughout the trading session,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.

“Though weakness is visible on short-term charts bulls are putting up a brave face with new lifetime highs. Hence, traders can choose to flow with the momentum but at the same time need to remain cautious and maintain tight stops for their long positions,” he said.

Mohammad advice traders to put a stop below 10600 on a closing basis for the next session.  If the move gets extended on the upside beyond 10660 a modest target of 10700 can be expected in the near-term.

Also ReadWhat changed for the market while you were sleeping? 15 things you should know

India VIX moved up by 0.78 percent at 13.85. VIX has to hold below 13-12.50 zones to support the fresh leg of the rally with a 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 10,637.0 on Tuesday. According to Pivot charts, the key support level is placed at 10,607.33, followed by 10,577.67. If the index starts to move higher, key resistance levels to watch out are 10,662.93 and 10,688.87.

Nifty Bank

The Nifty Bank closed at 25,703.8. Important Pivot level, which will act as crucial support for the index, is placed at 25,612.73, followed by 25,521.66. On the upside, key resistance levels are 25,799.33, followed by 25,894.87.

Call Options Data

Maximum Call open interest (OI) of 45.33 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 10,600, which now holds 40.66 lakh contracts in open interest, and 10,700, which has accumulated 38.85 lakh contracts in OI.

Call writing was seen at a strike price of 10,700, which saw the addition of 3.03 lakh contracts, followed by 10,600, which saw the addition of 2.85 lakh contracts and 10,800, which saw the addition of 1.02 lakh contracts.

Call unwinding was seen at strike prices of 10,500, which saw 1.5 lakh contracts being shed, followed by 10,400, which shed 1.2 lakh contracts and 10,300, which shed 0.47 lakh contracts.

image 1

Put Options Data:

Maximum put OI of 69.57 lakh contracts was seen at strike price 10,500, which will act as a crucial base for the index in January series; followed by 10,400, which now holds 68.86 lakh contracts and 10,300 which has now accumulated 55.61 lakh contracts in open interest.

Put writing seen at 10,600, which saw the addition of 10.97 lakh contracts, followed by 6.93 lakh contracts at the strike price of 10,500 and 10,400, which saw the addition of 4.38 lakh contracts.

There was hardly any Put unwinding seen.

image 2

FII & DII Data:

Foreign institutional investors (FIIs) sold shares worth Rs 303.94 crore, while domestic institutional investors bought shares worth Rs 522.9 crore in the Indian equity market on Tuesday, as per provisional data available on the NSE.

Fund Flow Picture:

image 3

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.

image 4

65 stocks saw long build-up:

image 5

9 stocks saw short covering

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

image 6

118 stocks saw short build-up

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

image 7

21 stocks saw long unwinding

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

image 8

Bulk Deals

Camlin Fine Sciences Ltd: Nimi Enterprises bought 7,00,000 shares at Rs 132.23 per share while Leena Ashish Dandekar sold 29,90,395 shares at Rs 130.04  per share on the NSE.

Ajooni Biotech Limited: Varshney Alpna sold 44,000 shares at an average price of Rs50.35

Aurangabad Distillery Ltd: Indu Jain bought 84,000 shares worth Rs35.

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

image 9

Analyst, Board Meet/Briefings

Prabhudas Lilladher is meeting the management of Ashoka Buildcon on January 10, 2018.

Investors are meeting the senior management of Graphite India on January 10, 2018.

Aditya Birla Mutual Fund and Edelweiss Securities is meeting the management of Cochin Shipyard on January 10 and 12, respectively.

Westwood Global Investments, Investec Capital Services, JPMorgan, Citibank, and Goldman Sachs is meeting the management of Tata Steel between January 11 and 12, 2018.

Stocks in the News

Power Grid: Board approves the investment of Rs 92.13 crore for the firm.

Infosys: Signs advance pricing agreement with US internal revenue service

Telecom Stocks: Telecom Commission favours raising spectrum holding limit

NMDC: Institutional investors put in bids worth Rs 976 crore on Tuesday for buying government's part stake in state-owned miner National Mineral Development Corporation (NMDC).

DCB Bank: DCB Bank approve to raise Rs 150 crore via bond

SAIL: LN Mittal’s ArcelorMittal and state-owned Steel Authority of India (SAIL) are exploring a joint bid for Bhushan Steel, the distressed company referred to the National Company Law Tribunal, Moneycontrol has learned from two independent industry sources.

Apollo Tyres: Apollo Tyres said it will invest around Rs 1,800 crore on a new plant in Andhra Pradesh, the company's seventh facility globally, to cater to the rising demand for passenger vehicle tyres.

IDFC Bank, Capital First Explore Merger: Talks at initial stage; deal will help bank tap into 5 m retail & SME customers of latter

Motherson Sumi forms JV with Ossia, to invest USD 14 million

IL&FS Technologies bags Rs 200 crore surveillance project contract

Vedanta, Tata Steel, two others submit bids for Electrosteel

SBI to raise Rs 5,000 crore via bonds for affordable housing

CIL revises coal prices, expects revenue gain of Rs1,956 crore in current fiscal

Axis Bank Looks to Foray into Life Insurance Business

BoB, Union Bank Put Over Rs 17k-cr Bad Loans on Sale

GAIL should lay pipeline, marketing can be done by anyone: Oil Minister Pradhan
GAIL as a company should focus on providing infrastructure particularly in eastern India to aid the country's transformation to a gas-based economy, Pradhan

opined.

Essar in talks with Brookfield to sell office buildings in Mumbai for Rs 2,400 crore

Whirlpool to lift fridge output capacity with Rs 182-cr outlay

Coal India hikes prices, power producers see rise in tariffs

10 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 Fortis Healthcare, GMR Infra, HDIL, IFCI, Jindal Steel, Jain Irrigation, JP Associates, Reliance Communications, Reliance Capital, and Wockhardt Pharma.
First Published on Jan 10, 2018 07:45 am
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