Moneycontrol
Last Updated : Mar 14, 2018 07:41 AM IST | Source: Moneycontrol.com

Trade Setup for Wednesday: Top 15 things to know before Opening Bell

If the index manages to close above its 50-DEMA then the rally could extend towards 10600 where there is an accumulation of maximum Call open interest (OI).

Uttaresh Venkateshwaran @UttareshV
Sandip Das @Im_Sandip1

The Nifty which started on a positive note failed to hold on to gains and closed flat on Tuesday making a ‘Shooting Star’ kind of a pattern on the daily candlestick charts.

A 'Shooting Star' pattern is formed when the index comes under selling pressure at higher levels as traders start booking profits.

This pattern is usually formed in an uptrend and is treated as a reversal pattern, but it would require confirmation before we can conclude that the trend will get reversed in the near future.

In exact 'Shooting Star' formation, the distance between the lowest price for the day and the closing price must be very small or nonexistent. However, in Tuesday's session, Nifty opened at 10,389 and slipped to an intraday low of 10,377. It closed marginally higher at 10,426.

The bulls look very much in control and the short coverings move could extend for a couple of more sessions. The next crucial levels which could act as stiff resistance for the bulls is 10,478 which is close to its 50-DEMA which is placed at 10,492.

If the index manages to close above its 50-DEMA then the rally could extend towards 10600 where there is an accumulation of maximum Call open interest (OI).

“Bears appear to have succeeded in trapping the bulls at intraday high of around 10470 levels in the post-luncheon session as Nifty witnessed a sharp correction of 90 points within few minutes before signing off the day with a shooting star kind of formation,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“However, the macro technical picture of the session doesn’t look so grim as bulls succeeded in hammering out the bottom within 15 minutes at intraday low of 10377 after a sharp crack that too with almost 2:1 advance-decline ratio which is not a mean achievement on such a day,” he said.

It looks like bulls are pretty much in the game and unless 10,377 is breached in next session selling pressure may not be that severe going forward.

Mohammad further added that for bulls to regain their strength needs to close above Tuesday’s high 10,478 levels which is also close to 50-Day EMA (10,492) which is again a critical resistance point.

“Hence, unless Nifty conquers 10492 on the closing basis a bigger upmove may not be witnessed whereas bears to establish upper hand need to push the indices below 10377 levels. Till then traders should prepare for sideways consolidation for near term,” he said.

India VIX declined marginally by 0.20% at 14.46. We require volatility to decline below 13-13.50 to extend its recent bounce back move.

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

Key support and resistance level for Nifty:

The Nifty closed at 10,426.8 on Tuesday. According to Pivot charts, the key support level is placed at 10,376.87, followed by 10,326.93. If the index starts to move higher, key resistance levels to watch out are 10,477.67 and 10,528.53.

Nifty Bank:

The Nifty Bank closed at 24,738.7 on Tuesday. The important Pivot level, which will act as crucial support for the index, is placed at 24,554.3, followed by 24,369.9. On the upside, key resistance levels are placed at 24,966.4, followed by 25,194.1.

Call Options data:

In open interest, 10,500 has seen most call writing at 48.52 lakh contracts. This could act as a crucial resistance level for the index in the March series. The second-highest build-up has taken place at 10,700, which has seen 40.66 lakh contracts, and 10,600 strike price, which has accumulated 38.63 lakh contracts.

Call writing was seen at the strike price of 10,700, which saw an addition of 11.15 lakh contracts, followed by 11,000, which added 2.89 lakh contracts.

Call unwinding was seen at the strike price 10,600, which shed 13.15 lakh contracts, followed by strike price of 10,400, which shed 7.1 lakh contracts, and 10,300, which shed 3.7 lakh contracts.

Image1

Put Options data:

Maximum put open interest of 48.84 lakh contracts was seen at strike price 10,000, which will act as a crucial base for the index in March series; followed by 10,400, which now holds 45.69 lakh contracts, and 10,300, which has now accumulated 39.33 lakh contracts.

Put writing was seen at the strike price of 10,400, which saw addition of 7.7 lakh contracts, along with 10,500, which added 5.37 lakh contracts, and 10,100, which added 49,000 contracts.

Put unwinding was seen at the strike price of 10,000, which shed 5 lakh contracts, followed by 10,300, which shed 4.03 lakh contracts and 10,200, which shed 1.95 lakh contracts.

Image2

FII & DII data:

Foreign institutional investors (FIIs) bought shares worth Rs 7,028.42 crore, while domestic institutional investors sold shares worth Rs 1,613.39 crore in the Indian equity market, as per provisional data available on the NSE.

Fund flow picture:Image3Stocks with high delivery percentage:

High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.

Image4

135 stocks saw long build-up:

Image5

38 stocks saw short covering:

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

Image6

49 stocks saw short build-up:

An increase in open interest along with a decrease in price mostly indicates build-up of short positions.

Image7

9 stocks saw long unwinding:

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

Image8

Bulk Deals:

Castex Technologies Ltd: Standard Chartered Bank sold 20,00,000 shares at Rs 4.56 per share

CKP Leisure Limited: Nikhil Satish Pore bought 2,28,000 shares at Rs 29.50 per share

Manaksia Limited: Mittu Agarwal sold 6,87,265 shares at Rs 52.00 per share

(For more bulk deals click here)

Analyst or Board Meet/Briefings:

Vedanta: The Board of the firm will be meeting on March 26, 2018 to discuss a dividend issue.

Indian Hotels: UBS Global Asset Management and Legatum Capital met the management on March 12 and 13, 2018.

ACC: The company will host an investor meeting on March 14 and 15, 2018. Attendees may include Reliance MF, L&T MF, SBI MF, LIC, New India Assurance, SBI Life, ICICI Pru Life, Aditya Birla MF and ICICI Pru Mutual Fund.

eClerx: HDFC Securities will be meeting the management on March 14, 2018.

Stocks in news:

HDFC: The Board will be meeting on March 16, 2018 to consider its dividend issue.

Balrampur Chini: CRISIL has rated its loan facilities. Total bank facilities rated is worth Rs 2,283 crore and have been rated AA/Stable for the long term rating.

L&T Finance Holdings: The company has successfully closed QIP of up to Rs 1,000 crore.

Gitanjali Gems: NSE has fined the company, along with ABG Shipyard, Amtek Auto, DS Kulkarni Developers, Bharati Defence and Infrastructure, Educomp Solutions, Shree Renuka Sugars, Moser-Baer (I) and Sterling Biotech for failing to file December quarter results.

Phoenix Mills: According to a Mint report, the company is planning to more than double its office portfolio to 3.5 million sq ft in four years.

NTPC: The firm has commissioned the third unit of Kudgi Super Thermal Power Station, according to Hindu Business Line.

MTNL: The firm and BSNL, along with Air India have been the worst performing PSUs in FY17, according to a PTI report.

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Hindustan Zinc board to approve second interim dividend for ongoing fiscal this week

Winsome Diamonds loan default: Hasmukh Shah remanded in CBI custody

IRB Infra bags two road projects from NHAI in Tamil Nadu

Hero Motocorp launches Passion PRO, Passion XPRO

Six stocks under ban period on NSE

Security in ban period for the next day's trade 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 Andhra Bank, Balrampur Chini, BEML, DHFL, IDBI Bank, and JP Associates.
First Published on Mar 14, 2018 07:30 am
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