Trade setup for December 19: Top 15 things to know before the opening bells

Here's your pre-market briefing for December 19.

Yesterday, December 18, the Nifty 50 closed without significant change, showing a slight downward trend. This marks the fourth consecutive session of lower highs and lower lows. Despite this, both Nifty and Bank Nifty seem to be forming bullish reversal patterns. The Nifty 50 held its ground at the 50-day EMA and the upward-sloping support trendline (25,750–25,800 range), along with the bullish gap zone from November 12 (just above 25,700).

According to market experts, if the index bounces back, the 25,900–26,000 area might present resistance. That said, the reality is a bit more complicated. a decisive drop below 25,750–25,700 could lead to a fall towards the 25,500–25,450 zone.

To assist you in identifying potential trading opportunities, here are 15 key data points to consider:

**1) Nifty 50 Key Levels (25,816)**

• Resistance based on pivot points: 25,882, 25,924, and 25,991
• Support based on pivot points: 25,747, 25,706, and 25,639
• Special Formation: On the daily chart, the Nifty 50 formed a bullish candle resembling an inverted hammer (though not a classic one). This pattern typically suggests a bullish reversal. The index remained between short- and medium-term moving averages at close. That said, the reality is a bit more complicated. momentum indicators remained bearish, with the RSI at 46.37 and the MACD trending downwards toward the zero line, accompanied by a further decline in the histogram, suggesting cautious sentiment with limited upside momentum.

**2) Bank Nifty Key Levels (58,913)**

• Resistance based on pivot points: 59,136, 59,253, and 59,444
• Support based on pivot points: 58,755, 58,638, and 58,447
• Resistance based on Fibonacci retracement: 59,467, 60,895
• Support based on Fibonacci retracement: 58,643, 58,296
• Special Formation: The Bank Nifty formed a bullish candle with a long upper shadow, similar to an inverted hammer, which typically signals a potential bullish reversal. This suggests that selling pressure might be weakening, with buyers attempting to regain control by testing the 20-day EMA intraday. The index held above the rising support trendline and the previous day’s low at closing. That said, the reality is a bit more complicated. momentum indicators remained weak, with the RSI declining to 49.58 and the MACD staying below the reference line, along with further weakness in the histogram. This indicates tentative stabilization, but confirmation of momentum is still needed.

**3) Nifty Call Options Data**

The weekly options data indicates that the 26,000 strike has the highest Call open interest (1.27 crore contracts). This could act as a key resistance level for Nifty in the short term, followed by the 25,900 strike (1.03 crore contracts) and the 26,500 strike (85.55 lakh contracts).

The 26,600 strike saw the maximum Call writing, with 20.1 lakh contracts added, followed by the 25,800 and 26,200 strikes, adding 13.57 lakh and 10.04 lakh contracts, respectively. The 26,150 strike saw the maximum Call unwinding, shedding 10.01 lakh contracts, followed by the 26,300 and 26,650 strikes, shedding 8.22 lakh and 3.33 lakh contracts, respectively.

**4) Nifty Put Options Data**

On the Put side, the 25,500 strike holds the maximum Put open interest (74.18 lakh contracts), potentially acting as a key support level for Nifty in the short term. It's followed by the 25,800 strike (66.99 lakh contracts) and the 25,600 strike (65.8 lakh contracts).

Maximum Put writing occurred at the 25,600 strike, with an addition of 30.07 lakh contracts, followed by the 25,700 and 25,400 strikes, adding 20.2 lakh and 16.94 lakh contracts, respectively. The 25,350 strike experienced the maximum Put unwinding, shedding 10.92 lakh contracts, followed by the 25,900 and 26,100 strikes, shedding 8.03 lakh and 1.44 lakh contracts, respectively.

**5) Bank Nifty Call Options Data**

Monthly options data shows the 59,500 strike holding the maximum Call open interest, with 18.32 lakh contracts. This may serve as a key resistance level in the short term. Following this are the 60,000 strike (17.9 lakh contracts) and the 59,000 strike (11.88 lakh contracts).

The 60,200 strike saw the highest Call writing (55,475 contracts added), followed by the 60,100 strike (32,900 contracts) and the 60,300 strike (28,280 contracts). The maximum Call unwinding occurred at the 59,600 strike, shedding 47,425 contracts, followed by the 59,400 and 59,200 strikes, shedding 46,725 and 46,130 contracts, respectively.

**6) Bank Nifty Put Options Data**

Regarding Put options, the 59,000 strike shows the highest open interest (12.83 lakh contracts), potentially acting as a key level for the index. Next are the 59,500 strike (12.59 lakh contracts) and the 58,000 strike (10.08 lakh contracts).

The 58,700 strike saw the maximum Put writing (62,055 contracts added), followed by the 58,300 strike (53,410 contracts) and the 58,800 strike (39,795 contracts). The 59,500 strike experienced the most Put unwinding, shedding 2.2 lakh contracts, followed by the 58,000 and 57,500 strikes, shedding 1.02 lakh and 70,770 contracts, respectively.

**7) Funds Flow (Rs crore)**

(Note: The original article omits specific fund flow data. This information would typically be presented in a table or list.)

**8) Put-Call Ratio**

The Nifty Put-Call ratio (PCR) increased to 0.83 on December 18, up from 0.77 in the previous session. This indicates increasing bullish sentiment as more Put options are being sold than Call options. A PCR above 0.7 or 1 generally points to a strengthening bullish market sentiment. Conversely, a ratio below 0.7 or closer to 0.5 suggests a bearish mood, with more Call options being sold than Put options.

**9) India VIX**

The India VIX, a measure of market volatility, decreased for the third consecutive session, dropping 1.32 percent to 9.7. This marks a new closing low on Thursday, favoring bullish positions. Low volatility levels often suggest the potential for a sharp market movement in the near future.

**10) Long Build-up (58 Stocks)**

Long build-up was observed in 58 stocks. An increase in both open interest (OI) and price signifies the establishment of long positions.

**11) Long Unwinding (27 Stocks)**

Long unwinding was seen in 27 stocks. A decrease in OI coupled with a price decrease indicates long positions being closed.

**12) Short Build-up (83 Stocks)**

Short build-up occurred in 83 stocks. An increase in OI along with a price decrease signals the creation of short positions.

**13) Short-Covering (45 Stocks)**

Short-covering was observed in 45 stocks, meaning a decrease in OI alongside a price increase.

**14) High Delivery Trades**

(Note: The original article omits specific stocks with high delivery trades. This information would typically be presented in a table or list.) Stocks with a high percentage of delivery trades are listed. A high delivery share suggests investment interest in the stock, as opposed to speculative trading.

**15) Stocks Under F&O Ban**

Securities are placed under the F&O ban when derivative contracts exceed 95 percent of the market-wide position limit.

• Stocks added to F&O ban: Sammaan Capital
• Stocks retained in F&O ban: Nil
• Stocks removed from F&O ban: Bandhan Bank

*Disclaimer: The views and investment tips expressed by experts are their own. Please consult with certified experts before making any investment decisions.*