Trade Setup for Thursday - Top 15 things to know

Trade Setup for Thursday - Top 15 things to know

Failure of the Nifty to head to 12,050 could lead to another drop to 11,750 levels, says Shrikant Chouhan of Kotak Securities

  • The market wiped out gains in the afternoon, but the recovery in last hour of trade helped benchmark indices close in the green for fourth consecutive session on October 21, led by banking and financials, and metals stocks.

  • The BSE Sensex rose 162.94 points to 40,707.31, while the Nifty50 gained 40.90 points at 11,937.70 and formed small bodied bearish candle which resembles Hanging Man kind of pattern on the daily charts.

  • “On the daily chart, the market established a ‘Hanging Man’ structure after correcting to a very harsh but far-reaching level of 11745. This invites a bearishness, however, for that it must be at the top of the rally, which is not the case. It has spent a lot of time between 12,030 and 11,660. The Nifty must do something to keep this momentum going. The Nifty needs to move back to the level of 12,050. Failure to do so could lead to another drop in the 11,750 levels,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities told Moneycontrol.

  • “Stocks related to the core economy are starting to join the race and this would give another push to the Nifty. We could see the levels of 12,250, in case the Nifty crosses 12,050 levels. Support exists at 11,800 and below the level of 11,800. The Nifty could gradually fall to 11,600 levels,” he said.

  • Be level based trader on the day of weekly expiry of Index options, he advised.

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

  • Note: The open interest (OI) and volume data of stocks given in this story are the aggregates of three- month data and not of the current month only.

  • Key support and resistance levels on the Nifty

  • According to pivot charts, the key support levels for the Nifty are placed at 11,802.77, followed by 11,667.83. If the index moves up, the key resistance levels to watch out for are 12,045.67 and 12,153.63.

  • Nifty Bank

  • The Bank Nifty outperformed the Nifty50, rising 323.20 points, or 1.33 percent, to 24,635 on October 21. The important pivot level, which will act as crucial support for the index, is placed at 24,215.4, followed by 23,795.7. On the upside, key resistance levels are placed at 24,939.2 and 25,243.3.

  • Call option data

  • Maximum Call open interest of 26.18 lakh contracts was seen at 12,500 strike, which will act as crucial resistance in the October series.

  • This is followed by 12,000 strike, which holds 22.78 lakh contracts, and 12,200 strike, which has accumulated 20.86 lakh contracts.

  • Call writing was seen at 12,200 strike, which added 2.14 lakh contracts, followed by 12,400 strike which added 1.45 lakh contracts, and 12,500 strike which added 1.21 lakh contracts.

  • Call unwinding was seen at 11,500 strike, which shed 1.49 lakh contracts, followed by 12,000 strike, which shed 1.11 lakh contracts, and 11,900 strike which shed 71,325 contracts.