Trade setup for Monday: 15 things to know before opening bell

Nifty might consolidate around current levels before getting into strong mood

After recent consolidation, the bulls seem to have gained solid strength as the market recorded sharp upmove for second consecutive session and moved closer to 21,500 mark on December 15. The momentum indicator RSI (relative strength index) also showed positive bias, but reached to overbought stage (at 84.92, the highest levels since September 2021) and the PCR (Put-Call ratio) also jumped to 1.47 levels, hence, some kind of consolidation can’t be ruled out in coming days with immediate support at 21,300-21,200 zone, before getting back to the new upward journey above 21,500 mark, experts said.

On December 15, the BSE Sensex surged 970 points to 71,484, while the Nifty50 rose 274 points to 21,457 and formed long bullish candlestick pattern on the daily timeframe.

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“Technically, with the Nifty surging higher to new life highs, the bulls remain in control. Further upsides are likely once the immediate resistance of 21,492 is taken out,” Subash Gangadharan, senior technical and derivative analyst at HDFC Securities said.

He feels the caution is however warranted for the near term as the 14-day RSI at 84.92 is in overbought territory, but 14-week RSI at 75.87 implies that it is not extremely overbought and there is scope for more upsides in the intermediate term. Thus, any short-term corrections can be utilized to buy into quality stocks, he advised.

Crucial supports to watch for weakness are at 21,319-21,235, he said.

For the coming sessions, Jigar S Patel, senior manager – equity research at Anand Rathi also expects some consolidation from 21,500 levels. “A move above the same might extend the rally towards 21,800. On the data front, Nifty PCR is above 1.45, and this might result in some consolidation,” he said.

The broader markets gained but underperformed benchmark indices. The Nifty Midcap 100 index was up 0.11 percent and Smallcap 100 index gained 0.7 percent, while the India VIX, the fear index jumped above 13 mark, rising 6.55 percent to 13.13 levels, which is a bit of concern for bulls.

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

Key support and resistance levels on the Nifty

The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 21,493 followed by 21,554 and 21,652, while on the lower side, it can take support at 21,297 followed by 21,236 and 21,138 levels.

Nifty Bank

On December 15, the Bank Nifty surpassed another milestone of 48,000 mark for the first time and jumped 411 points to 48,144, forming bullish candlestick pattern with long lower shadow on the daily scale, indicating buying interest seen at lower levels.

“The successful close above the 48,000 hurdle opens the door for additional bullish momentum toward levels of 48,500/48,800,” Santosh Meena, Head of Research at Swastika Investmart said.

He feels immediate support lies at 47,500, with a critical support zone at 47,000–46,800 in case of a downturn.

As per the pivot point calculator, the index is expected to see resistance at 48,223, followed by 48,362 and 48,586, while on the lower side, it may take support at 47,775, followed by 47,636 and 47,412.

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Call options data

On the weekly options front, the maximum Call open interest was seen at 22,200 strike with 66.61 lakh contracts, which can act as a key resistance level for the Nifty in the short term. It was followed by the 21,500 strike, which had 46.64 lakh contracts, while the 22,500 strike had 45.80 lakh contracts.

Meaningful Call writing was also seen at the 22,200 strike, which added 33.59 lakh contracts followed by 22,000 and 21,700 strikes, which added 16.12 lakh and 15.95 lakh contracts.

The maximum Call unwinding was at the 21,200 strike, which shed 12.55 lakh contracts followed by 21,100 and 21,300 strikes, which shed 10.02 lakh and 6.33 lakh contracts.

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Put option data

On the Put front, the 21,300 strike has the maximum open interest, which can act as a key support area for the Nifty, with 70.57 lakh contracts. It was followed by 21,200 strike comprising 59.91 lakh contracts and 20,500 strike with 49.05 lakh contracts.

Meaningful Put writing was at 21,300 strike, which added 60.7 lakh contracts followed by 21,400 strike and 21,200 strike, which added 40.71 lakh contracts and 23.62 lakh contracts.

Put unwinding was at 21,100 strike, which shed 12.35 lakh contracts followed by 20,500 strike, which shed 9.72 lakh contracts and 20,400 strike which shed 17,750 contracts.

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Stocks with high delivery percentage

A high delivery percentage suggests that investors are showing interest in the stock. Godrej Consumer Products, Container Corporation of India, Crompton Greaves Consumer Electricals, ICICI Lombard General Insurance Company, and Cholamandalam Investment & Finance Company saw the highest delivery among the F&O stocks.

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46 stocks see a long build-up

A long build-up was seen in 46 stocks, which included National Aluminium Company, Oracle Financial, L&T Technology Services, ABB India, and Bharat Electronics. An increase in open interest (OI) and price indicates a build-up of long positions.

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41 stocks see long unwinding

Based on the OI percentage, 41 stocks saw long unwinding, including Max Financial Services, HDFC Bank, Zee Entertainment Enterprises, Bata India, and Eicher Motors. A decline in OI and price indicates long unwinding.

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36 stocks see a short build-up

A short build-up was seen in 36 stocks, which were Nestle India, ICICI Prudential Life Insurance Company, HDFC Life Insurance Company, Navin Fluorine International, and Maruti Suzuki India. An increase in OI along with a fall in price points to a build-up of short positions.

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62 stocks see short-covering

Based on the OI percentage, 62 stocks were on the short-covering list. These include SAIL, Hindustan Copper, GMR Airports Infrastructure, Hero MotoCorp, and L&T Finance Holdings. A decrease in OI along with a price increase is an indication of short-covering.Image1716122023

PCR

The Nifty Put Call ratio (PCR), which indicates the mood of the equity market, climbed to 1.47 on December 15 (the highest level in last 12 trading sessions), from 1.37 levels in the previous session. The above 1 PCR indicates that the traders are buying more Put options than Calls, which generally indicates an increase in bearish sentiment.

Bulk deals

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Stocks in the news

Lupin: The pharma major has received approval from the United States Food and Drug Administration (US FDA) for its abbreviated new drug application for Allopurinol tablets USP, 100 mg and 300 mg to market a generic equivalent to the reference listed drug (RLD), Zyloprim tablets, of Casper Pharma LLC.

United Spirits: The company has received a claim amounting to Rs 365.33 crore from one of its existing national institutional customers. The claim is in relation to a previously concluded settlement with the customer where all recovery claims made by the customer had been fully settled. The company is not in a position to determine the financial implication of this claim at this point of time.

Tata Power Company: Tata Power Solar Systems, a wholly-owned subsidiary of Tata Power Renewable Energy, has signed a contract to supply 152 MWp DCR solar PV modules for NTPC’s Nokh solar PV project in Rajasthan. The project order value is approximately Rs 418 crore. NTPC is developing 3*245 MW (735 MW) Nokh Solar Park at Pokaran, Rajasthan.

Mazagon Dock Shipbuilders: The shipbuilding company has signed individual shipbuilding contracts with the European client for construction of three units of 7,500 DWT multi-purpose hybrid powered vessels. The contract is valued at approximately $42 million.

Mankind Pharma: The healthcare company has made investment of 999,900 pound in Actimed Therapeutics, for additional 1.29 percent stake. Post this investment, the aggregate shareholding of the company in Actimed will be 10.19 percent. It is a strategic investment in the field of treatment of cancer cachexia, amyotrophic lateral sclerosis and other muscle wasting disorders.

Funds Flow (Rs Crore)

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FII and DII data

Foreign institutional investors (FIIs) net bought shares worth Rs 9,239.42 crore, while domestic institutional investors (DIIs) sold Rs 3,077.43 crore worth of stocks on December 15, provisional data from the National Stock Exchange (NSE) showed.

Stock under F&O ban on NSE

The NSE has retained Balrampur Chini Mills, Delta Corp, Hindustan Copper, India Cements, Manappuram Finance, SAIL and Zee Entertainment Enterprises to its F&O ban list for December 18. Indiabulls Housing Finance was removed from the said list.

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.

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