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Trade Setup for Thursday: Top 10 things you should know

Yatheendradas C.k. at 05:53 AM - Jul 27, 2017 ( ) Views: 270

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Jul 26, 2017 10:05 PM IST | Source: Moneycontrol.com

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

Thursday happens to be the expiry day for July F&O contracts. The outcome of the US Fed meeting will be crucial for Nifty's 10K prospects.

Moneycontrol News

The Nifty closed above its crucial resistance level of 10,000 for the first time on Wednesday and made a bullish candle on the daily candlestick charts negating bearish belt hold pattern formed in the previous trading session.

A bullish candle formed on the daily chart on Wednesday signifies that the market witnessed sustained buying interest from the bulls for the most part of the trading day, which is a bullish sign.

The index rallied to a fresh record high of 10,025.95 and ended at a fresh closing high of 10,020.65 which opens up the window for target above 10,200-10,300, suggest experts.

 

Investors are advised to stay long as there could be a possibility of short covering ahead of July F&O expiry on Thursday. Investors can maintain long positions for an immediate target of 10,050-10,100 and place a stop below 9,949-levels, suggest experts.

“The Nifty50 signed off the day in style with a close above 10,000-mark which also witnessed a breakout above its 3-month old ascending channel on the daily charts,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“This breakout is throwing up a new target placed around 10,350 levels besides negating the bearish formations witnessed in Tuesday’s trading session suggesting strong momentum on the upside,” he said.

Thursday happens to be the expiry day for July F&O contracts. The outcome of the US Fed meeting could well decide the fate of 10,000-level on Nifty. A more hawkish Fed could well lead to index testing its support levels.

We have collated top ten data points to help you spot profitable trade.

Key Support & Resistance Level for Nifty:

The Nifty closed above 10,000 for the first time ever at 10,020.7 on Wednesday. According to Pivot charts, the key support level is placed at 9,982.43, followed by 9,944.17. If the index starts to move higher, key resistance levels to watch out are 10,042.48 and 10,064.27.

Nifty Bank:

The Nifty Bank closed 150 points higher at 24670.70 on Wednesday. Important Pivot level, which will act as crucial support for the index, is placed at 24530.1, followed by 24389.5. On the upside, key resistance level is 24766.1, followed by 24861.5.

Call Options Data:

Maximum Call open interest (OI), of 53.73 lakh contracts, stands at strike price 10,000, which will act as a crucial resistance level for the index in the July series, followed by 10,100, which now holds 41.71 lakh contracts in open interest, and 9,900, which has accumulated 13.24 lakh contracts in OI.

Call writing was seen at strike price 10,100 , which saw the addition of 7.93 lakh contracts added.

Meanwhile, Call unwinding was seen at strike prices 10,000 (20.13 lakh contracts were shed), followed by 9,900 (13.74 lakh contracts shed), and 9,800 (4.02 lakh contracts shed).

Image1

Put Options Data:

Maximum Put OI of 54.72 lakh contracts was seen at strike price 9,900, which will act as a crucial base for the index in July series, followed by 9,700, which has accumulated 48.88 lakh contracts in open interest, and 9,800, which now holds 43.85 lakh contracts in open interest.

Put writing was seen at strike prices 10,000 (13.07 lakh contracts added), followed by 10,100 (2.18 lakh contracts added).

Meanwhile, put unwinding was seen at strike prices 9,500 (4.12 lakh contracts shed), followed by 9,600, where 3.07 lakh contracts were shed along with 9,700 (1.77 lakh contracts).

Image2

FII & DII Data:

Foreign institutional investors (FIIs) sold shares worth Rs 60.6 crore compared to domestic institutional investors, which purchased Rs 676.61 crore worth shares in the Indian equity market.

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.

Image3

105 stocks saw long buildup

Image4

4 stocks saw short covering:

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

Image5

2 stock saw long unwinding:

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

Image6

56 stocks saw short buildup:

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

Image7


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