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Trade setup for Monday: Key things to know before stock market's Opening Bell today

Trade setup for Monday: After trading highly volatile on Friday, key benchmark indices ended around its close on Thursday as NSE Nifty finished 3 points lower at 17,539 and BSE Sensex ended 36 points higher at 58,803. However, Nifty Bank index surged 119 points and closed at 39,421 levels. Mid-cap index underperformed Nifty falling 0.35 per cent even as the advance decline ratio was negative at 0.86:1. Among sectors, capital goods index rose the most while oil & gas and metal indices fell the most.

Here we list out key things that you should know before stock market’s opening bell today:

Global markets cues

On Friday session, Wall Street witnessed heavy weekend selling as Dow Jones finished 1.07 lower, tech heavy Nasdaq ended 1.31 per cent down, S&P 500 slipped 1.07 per cent whereas Small Cap 2000 went down 0.81 per cent. World stocks were heading for a 3 per cent loss on the week while the dollar hit 24-year highs against the yen ahead of key US jobs data, as investors brace for US jobs report on Friday last week and aggressive rate hikes from the Federal Reserve. Likely resumption of Russian gas supplies to Europe stabilised sentiments in Europe.

Nifty technical outlook

Speaking on Nifty 50 index outlook, Mehul Kothari, AVP — Technical Research at Anand Rathi said, “The bearish shark pattern on the Nifty 50 index is still intact. In addition, the index has breached previous week’s low after nine week and this indicates first sign of weakness. Also we are witnessing a reversal candlestick pattern on the weekly scale. We reiterate that; even a bare minimum correction of 38.6% of the entire rally from 15200 to 18000 could lead to a bigger crack in the stocks. Thus, we maintain our stance that the prudent strategy can be to avoid fresh longs in index and book profits in trading bets.:

Mehul Kothari further added, “On the downside; 17350 might a crucial support for the coming weeks. A breach of this support might drag the index towards 17000 – 16800 levels. On the upside; 17750 – 18000 might be a supply zone for the coming weeks. We would turn aggressive bullish only on a close above 18000 mark. The recent price action indicates signs of some distribution and hence we have a cautious stance on the markets.”

Nifty Bank technical outlook

“Nifty Bank index recovered back to reclaim 39,000 mark and end the week extremely flat. We maintain a cautious stance on Nifty Bank index and below 38,000 we might see a corrective move toward 37,000 to 36,000 in the coming weeks. The view would be negated above 40,000 mark on closing basis and that would affirm a fresh breakout in the index,” said Mehul Kothari.

Nifty Call Put Option data

On Nifty call put ratio, Shilpa Rout, Derivatives Lead Analyst at Prabhudas Lilladher said, “Market continues to be sudeqaus for the second consecutive day. NIFTY Option chain for the weekly expiry reflects on CE writers aggressively adding over 90 thousand contracts at all the way up till 18000CE, with PE writers making their way at 17000PE – with more than 90 thousand contracts overall, followed by 16500PE. Fresh highest contracts added at 17500PE, which hints on the immediate range in between 17400-18000 going forward. PCR OI at 17500 being nearly 2, continues to support the index.”

Nifty Bank Call Put Option data

“Nifty Bank Future Option chain on PE writers being active at 38000PE – with more than 60 thousand contracts, and CE writers adding clustered positions from 39500-40000 strikes. Thus the data hints on the trading range in between 38000-40300 going ahead now,” Shilpa Rout of Prabhudas Lilladher said.

Foreign institutional investors (FIIs) have net sold 8.79 crore worth of shares, whereas domestic institutional investors (DIIs) have net sold 668.74 crore worth of shares on September 2, as per provisional data available on the NSE.

NSE F&O ban list

The National Stock Exchange (NSE) has added Delta Corp stock under its F&O ban list for trade date 5th September 2022. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 per cent of the market-wide position limit.

US bond yield

US 10 year bond yield is up by 0.13 per cent to 3.195 whereas US 30 year bond yield is up by 0.12 per cent to 3.348.

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