Trade Setup for Thursday: Top 15 things to know before Opening Bell
Uttaresh Venkateshwaran & Sandip Das
Bulls managed to recoup early losses on D-Street and helped the Nifty to close above 10500 levels for the first time since February 26 on Monday. The index formed a strong bullish candle on the daily candlestick charts.
Despite weak global cues Nifty managed to close above its crucial resistance levels of 10500 towards the close of the trade which has opened fresh target for the index towards 10600 levels. Investors are advised to maintain their long positions with a stop below 10370 levels.
The Nifty index opened gap down but witnessed sustained buying interest throughout the trading session to settle near day’s high which suggests strength in Indian markets.
The Nifty Midcap index and the Nifty bank gain more than 100 points each. The market breadth was in favour of declines despite gains. The advance-decline ratio stood at 1:1.
The Nifty which opened at 10398 slipped marginally to hit its intraday low of 10396 before bouncing back. It hit an intraday high of 10540 before closing 47 points higher at 10,528.
“In line with our expectations, bulls shrugged off the geopolitical tensions as initial dip was bought into by the market participants which resulted in a strong bullish candle formation suggesting that the trajectory of this market is changing from sell on rallies to buy on dips mode,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“However, as Nifty heads towards much higher levels, real challenge for bulls lies in destroying the critical resistance placed around 10630 levels. Once this level is decisively conquered then this upmove shall get extended further towards 10900 kind of levels,” he said.
But as the index registered its eighth successive close in positive terrain, some pause or consolidation can’t be ruled out going forward in next couple of trading sessions.
Mohammad further added that on the downsides positional traders are advised to place a stop below 10370 levels breach of which on closing basis shall once gain favour bears. Till then all dips should be considered as an opportunity to go long.
India VIX moved up by 0.51% at 14.21. VIX has to cool down to extend its positive momentum. On the options front, maximum Put OI was seen at 10300 followed by 10400 strikes while maximum Call OI is at 10700 followed by 10500 strikes.
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 10,528.3 on Monday. According to Pivot charts, the key support level is placed at 10,436.33, followed by 10,344.37. If the index starts moving upwards, key resistance levels to watch out are 10,580.23 and 10,632.17.
The Nifty Bank index closed at 25,320.8. The important Pivot level, which will act as crucial support for the index, is placed at 25,142.54, followed by 24,964.27. On the upside, key resistance levels are placed at 25,423.84, followed by 25,526.87.
Call Options data
In terms of open interest, the 10,700 call option has seen the most call writing so far at 44.16 lakh contracts. This could act as a crucial resistance level for the index in the April series.
The second-highest buildup has taken place in the 10,500 Call option, which has seen 39.78 lakh contracts getting written so far. The 11,000 Call option has accumulated 35.98 lakh contracts.
Call writing was seen at the strike price of 10,700, which added 3.59 lakh contracts, followed by 11,000, which added 51,450 contracts.
Call unwinding was seen at the strike price of 10,400, which shed 2.77 lakh contracts, followed by 10,500, which shed 2.36 lakh contracts, and 10,300, which shed 1.43 lakh contracts.
Put Options data
Maximum open interest in put options was seen at a strike price of 10,300, in which 55.45 lakh contracts been added till date. This could be a crucial resistance level for the index in April series.
The 10,400 put option comes next, having added 53.51 lakh contracts so far, and the 10,000 put option, which has now accumulated 44.79 lakh contracts.
During the session, put writing was seen the most at a strike price of 10,500, with 7.72 lakh contracts being added, followed by 10,400, which added 4.86 lakh contracts and 10,300 with 3.13 lakh contracts.
Put unwinding was seen at the strike price of 10,200, which shed 6.01 lakh contracts, followed by 10,000, which shed 2.41 lakh contracts.
FII & DII data:
Foreign institutional investors (FIIs) sold shares worth Rs 308.13 crore, while domestic institutional investors sold shares worth Rs 28.97 crore in the Indian equity market, as per provisional data available on the NSE.
Fund flow picture:
Stocks with high delivery percentage:
High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.
87 stocks saw long buildup
60 stocks saw short covering:
A decrease in open interest along with an increase in price mostly indicates short covering.
45 stocks saw short build-up:
An increase in open interest along with a decrease in price mostly indicates build-up of short positions.
18 stocks saw long unwinding
Aplaya Creations Ltd.: Shashikant Chinubhai Kapadia sold 1,596,000 shares at Rs 3.01 per share
Jyoti: Latin Manharlal Securities Pvt Ltd sold 625,000 shares at Rs 69.32 while Finquest Financial Solutions Pvt. Ltd. Bought 743,451 shares at Rs 69.33 per share.
Also, Panoramic Construction Private Limited bought 945,000 shares at Rs 69.35 per share.
(For more bulk deals click here)
Analyst or Board Meet/Briefings:
Mahindra & Mahindra: Motilal Oswal AMC will meet the management on April 18, 2018.
Neuland Labs: Nikko AMC, Morgan Stanley, Nomura AMC, Polunin Capital, Stewart Investors, and Goldman Sachs AMC met the management in Singapore on April 16, 2018.
Stocks in news:
Goa Carbon: Company resumes operations at Paradeep unit, Orissa from April 16
Fortis Health: The company said that the Board will meet this week to look at eligible options.
Reliance Communications: No legal restriction any more to proceed with sale of spectrum, MCNs & real estate.
Adani Ports: Signs A Long Term Regasification Pact With Indian Oil For Dhamra LNG Terminal
Results in focus: Crisil, Muthoot Capital, Orchid Pharma, and Tata Sponge Iron, among 9 companies declaring results on Tuesday.
5 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.
For April 17, 2018 Balrampur Chini, IRB, JP Associates Reliance Communications, and TV18 Broadcast are present in this list.