Trade Setup for Nov 13: NIFTY50 ends below August month low, all eyes on 200 EMA

Asian markets @ 7 am

• GIFT NIFTY: 23,891.5 (-0.19%)
• Nikkei 225: 38,962 (-1%)
• Hang Seng: 19,658 (- 1%)

U.S. market update

Dow Jones: 43,910 (▼0.8%) S&P 500: 5,983 (▼0.2%) Nasdaq Composite: 19,281 (▼0.0%)

US indices ended a five-day winning streak and closed Tuesday's session in the red as investors took a breather following Donald Trump's victory in the U.S. presidential election. Meanwhile, market participants will turn their attention to the Consumer Price Index for October. The latest reading on inflation comes after the Federal Reserve announced a quarter percentage cut.

NIFTY50

• November Futures: 23,959 (▼1.2%)
• Open Interest: 4,67,400 (▲3.7%)

After a positive start, the NIFTY50 surrendered all its opening gains in the second half of the session, forming a strong bearish candle on the daily chart. Additionally, the index also closed below the August month low, indicating weakness.

On the daily chart, the index has formed a strong bearish candle with resistance around 21 exponential moving average (EMA). Unless the index reclaims the 21 EMA, the trend may remain weak. Conversely, the next crucial support is visible around 23,500, which coincides with the 200 EMA.

The open interest data for the 14 November saw significant call build-up at 24,200 and 24,300 strikes, suggesting resistance for the index around these levels. On the other hand, the put base was seen at 23,500 strike, with low volume.

BANK NIFTY

• November Futures: 51,373 (▼1.4%)
• Open Interest: 1,98,026 (▲14.8%)

Amid broad-based selling across banking stocks, the BANK NIFTY index reversed previous day’s gains, forming a bearish engulfing candle on the daily chart.

The broader technical structure of the BANK NIFTY index remains range-bound as the index is currently consolidating between 52,800 and 49,700. However, if the index breaches the 51,000 mark on the closing basis, the weakness may extend upto 50,000 zone. On the flip side, the resistance remains at 52,800 and a close above this level may change the trend in favour of bulls.

On the 15-minute chart, the index has resistance around 52,200 zone and the support is visible between 51,000 and 50,800 zone. Unless the index breaks this range with a strong candle, the trend may remains sideways. However, if the index breaks this range then it may provide directional clues.

Meanwhile, the open interest data for today’s expiry has highest call base at 52,000 strike, suggesting resistance for the index around these level. Conversely, the put base was seen at 50,500 and 51,000 strikes with low volume.

FII-DII activity

Stock scanner

Under F&O ban: Aarti Industries, Aditya Birla Fashion and Retail, Granules India, Hindustan Copper and Manappuram Finance

Added under F&O ban: NIL

In Futures and Options or F&O, long build-up means an increase in Open Interest (OI) along with an increase in price, and short build-up means an increase in Open Interest(OI) along with a decrease in price.

Source: Upstox and NSE.

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