Trade setup for today: Market to remain sideways with positive bias; key things to know before opening bell

Bulls seemed to have gained control on Dalal street just before the year-end. Both benchmarks BSE Sensex and Nifty 50 ended in green for the second straight day on Tuesday. While Sensex ended 477.24 points or 0.83 per cent higher at 57,897.48, broader Nifty 50 index surged 147 points or 0.86 to settle at 17233.25. Over the last few days, reduced FII activity and positive news flows around economic growth has helped the market. Markets are likely to open on a weak note on Wednesday amid mixed global cues. SGX Nifty signalled gap-down start for BSE Sensex, Nifty50. Nifty futures were trading 50 points or 0.3 per cent down at 17,213 on the Singaporean Exchange in the early trade.

After witnessing a smart upside bounce from the lows on Monday the upside momentum with range bound action continued in Nifty on Tuesday and the market closed the day higher by 147 points. After opening with an upside gap of 91 points the market continued with upside momentum with range bound movement for the whole session. Intraday dips in between was bought into and the Nifty closed at the highs. The opening upside gap remains unfilled. A long bull candle was formed on the daily chart with gap up opening. Technically, this pattern indicate an uptrend continuation pattern, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

The initial resistance of up sloping trend line as per the concept change in polarity has been broken marginally on the higher side. Another hurdle of down sloping trend line is placed around 17350. Hence, the market needs to sustain above these two hurdle to show sharp upside movement. Tuesday’s upmove has negated the bearish engulfing pattern of Friday, which is positive indication. The negative sequence of lower tops and bottoms is still intact as per daily chart and a decisive move above 17400 is likely to negate this bearish pattern, he added.

Key things to know before market opening bell

Global markets

The S&P 500 closed slightly lower, down 4.84 points, or 0.10%, at 4,786.35 after hitting a record intraday high on Tuesday. The Dow Jones Industrial Average rose 95.83 points, or 0.26%, to 36,398.21, and the Nasdaq Composite dropped 89.54 points, or 0.56%, to 15,781.72. Shares in Asia-Pacific were mixed in early trade of Wednesday. Japan’s Nikkei 225 slipped 0.82% in early trade while the Topix index declined 0.44%. South Korea’s Kospi fell 0.75%. Mainland Chinese stocks also declined, with the Shanghai composite down 0.26%, and the Shenzhen component down 0.313%. Hong Kong’s Hang Seng index fell 0.58%. Australian stocks rose as the S&P/ASX 200 jumped nearly 1%. MSCI’s broadest index of Asia-Pacific shares outside Japan was trading 0.24% lower.

Nifty support, resistance levels

Nifty rose for the second consecutive session with advance decline ratio rising sharply to much above 1:1 even as volumes remain on the lower side. This reflects the lower presence of institutional players due to which traders are having a field day. Nifty will now face resistance in the 17298-17379 band, while 17155 could provide support. The broader markets could face some serious profit taking towards this weekend, said Deepak Jasani, Head of Retail Research, HDFC Securities.

Bank Nifty

The Nifty Bank gained 125.90 points to end 35,183.80 on Tuesday (December 28). The index has relatively underperformed the benchmark so far, but it is hovering around its crucial resistance level. At present, Bank Nifty has support at 34700 levels while resistance at 35600 levels, said Sachin Gupta, AVP Research, Choice Broking.

Volatility gauge

NSE’s India VIX index eased 3.8 percent to 16.5 on Tuesday (28 December).

Call option data

Maximum Call open interest of 72.81 lakh contracts was seen at 18,000 strike, followed by 17500 strike, which holds 67.90 lakh contracts, and 17300 strike, which has accumulated 48.92 lakh contracts. Call writing was seen at 17,300 strike, which added 10.87 lakh contracts, followed by 17500 strike (8.8 lakh contracts), and 17600 strike (8.03 lakh contracts), according to the data available with NSE,

Put option data

Maximum Put open interest of 99.08 lakh contracts was placed at 17000 strike, with almost two lakh contracts. This suggests immediate resistance at 17,500 and meaningful support only at 17,000 in the December series. This is followed by 16500 strike, which holds 69.19 lakh contracts, and 17100 strike, which holds 52.17 lakh contracts. Put writing placed at 17200 strike, which added 36.96 lakh contracts, followed by 17100 strike (19.95 lakh) contracts and 17300 (10.04 lakh), according to NSE data.

FII and DII data

Foreign institutional investors (FIIs) net bought shares worth Rs 207.31 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 567.47 crore in the Indian equity market on Tuesday (December 28), according to the provisional data available on the NSE.

Stocks under F&O ban on NSE

Indiabulls Housing Finance, Vodafone Idea, and RBL Bank are the stocks under the F&O ban for Wednesday (December 29). Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.

Analysts, Investors Meeting today

– CARE Ratings: Officials will meet Motilal Oswal

– Sharda Motor Industries: Officials will meet investors and analysts.

– Bajaj Electricals: Officials will meet investors.

– Nuvoco Vistas Corporation: Officials will meet Nomura Financial Advisory and Securities (India)

52-week highs

Tech Mahindra, Birlasoft, KPIT Tech, ESAB, KPR Mill, Metropolis Healthcare, Minda Industries and Navin Fluorine hit 52-week highs in the BSE 500 index on Tuesday.

52-week lows

MAS Financial Services, Jyothy Labs and Gillette were the three stocks in the broadest index to hit 52-week lows.