Trade setup for Thursday: Top 10 things you should know before Opening Bell | The GRS Solution :-
The Nifty, which hit a record high of 10,340.55 in trade on Wednesday failed to keep the momentum going and the index closed below its opening level making a ‘Hanging Man’ type of pattern on the daily charts.the grs solution
The large part of the rally was led by short covering after the index surpassed its previous record high of 10,251 earlier in the session. It started with a huge gap on the upside but closed below its psychological support level of 10,300.
A hanging man is a bearish reversal candlestick pattern that is formed at the end of an uptrend. In a perfect 'Hanging Man' pattern, there will be a small or no upper shadow. It would also have a long lower shadow with a small body.
Formation of a Hanging Man candle in the uptrend indicates a possible reversal or a top. But, Thursday being the expiry day, the market might witness some volatility. It has to continue to trade above 10250 for bullish bias to continue. the grs solution google plus
In Wednesday's price action, Nifty rose to 10,340.55 which made a small upper shadow and slipped nearly 100 points to hit intraday low of 10,240, which made a long lower shadow. The index closed 87 points higher at 10,295.35 which was below its opening level of 10,321.15.
“The Nifty registered yet another lifetime high as the ‘doosra’ delivered by the FM propelled the PSU Banking space for a massive short covering thereby leaving the bruised and battered bears to lick their wounds,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“But, at the end of the day Nifty appears to have witnessed a ‘Hanging Man’ kind of formation on the charts which may force the indices to pause in next trading session,” he said.
The market breadth remained muted towards the close on NSE with 622 stocks advancing as against 905 declines while on the BSE it was 1160 advanced and 1532 declined.
Mohammad further added that the breadth of the market is suggesting the same thing as on such a strong day for the index majority of the scrips witnessed profit booking thereby dominating the stocks which closed in the positive zone.
He further added that in the near-term we can expect Nifty to target 10380 – 10430 kind of levels whereas weakness shall remerge if it closes below 10237 levels.
We have collated the top ten data points to help you spot profitable trade:-
Key Support & Resistance Level for Nifty
The Nifty closed at 10,295.3 on Wednesday. According to Pivot charts, the key support level is placed at 10,243.97, followed by 10,192.63. If the index starts to move higher, key resistance levels to watch out are 10,343.57 and 10,391.83.
Nifty Bank
The Nifty Bank closed at 25,035.9 on Wednesday. Important Pivot level, which will act as a crucial support level for the index, is placed at 24,678.53, followed by 24,321.17. On the upside, key resistance levels are 25,275.53, followed by 25,515.17.
Call Options Data
Maximum call open interest (OI) of 45.87 lakh contracts stands at strike price 10,300, which will act as a crucial resistance level for the index in the October series, followed by 10,400, which now holds 34.12 lakh contracts in open interest; and 10,200, which has accumulated 21.41 lakh contracts in OI.
Call writing was seen at strike price of 10,300, which saw addition of 6.25 lakh contracts, followed by 1.54 lakh contracts at 10,400.
Call unwinding was seen at strike price of 10,200, which shed 14.17 lakh contracts; followed by 10,100, which shed 4.17 lakh contracts; and 10,000, which shed 2.84 lakh contracts.
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Put Options Data
Maximum Put OI of 64.44 lakh contracts was seen at strike price 10,000, which will act as a crucial base for the index in October series; followed by 10,200, which now holds 46.15 lakh contracts and 10,100 which has now accumulated 45.48 lakh contracts in open interest.
Put writing was seen at strike price of 10,300 (which added 17.17 lakh contracts in OI); followed by 10,200 (which added 1.96 lakh contracts).
Put unwinding was seen at strike price of 10,100, which saw shedding of 14.75 lakh contracts; followed by 10,000, which saw shedding of 6.12 lakh contracts; and 9,900, which saw shedding of 4.10 lakh contracts.
FII & DII Data
Foreign institutional investors (FIIs) bought shares worth Rs 3,582.5 crore, while domestic institutional investors sold shares worth Rs 155.71 crore on Thursday, as per provisional data available on the NSE.
