Nifty Option

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• April 7, 2024

Nifty 50 Pre-Open OI Data Analysis  and  Possible Intraday Trading Strategies -Aptil 8

Market Analysis:

The Indian stock market is anticipated to experience volatility in the upcoming session, with a focus on the 22,550-22,600 area serving as a significant hurdle on the higher side. A decisive close above this zone could propel the Nifty 50 towards 22,800 and then the 23,000 mark. Conversely, the key support zone for the index lies between 22,300-22,200. Experts note that declining volatility has provided comfort for bullish sentiments in the market.

On April 5, the BSE Sensex witnessed a minor uptick of 21 points to reach 74,248, following the Monetary Policy Committee’s decision to maintain the repo rate at 6.5 percent for the seventh consecutive time. However, the Nifty 50 fell marginally by 1 point to 22,514, forming a bullish candlestick pattern with a lower shadow on the daily charts, suggesting buying interest at lower levels. This indicates that the market had already factored in the outcome of the RBI policy meeting.

For the week, the index recorded a gain of 0.84 percent. Technical analysts suggest that the current consolidation phase is likely to persist within the range of 22,200 to 22,550 levels. Immediate support is identified at 22,300, with a broader support zone extending from 22,150 to 22,200.

Open Interest (OI) Data Analysis:

Analysis of the weekly options data reveals that the maximum Call open interest is observed at the 23,000 strike, indicating a potential resistance level for the Nifty in the short term. Additionally, significant Call writing is noted at the 22,800, 23,000, and 23,500 strikes. On the Put side, the 22,500 strike holds the maximum open interest, serving as a key support level. Meaningful Put writing is observed at the 22,400 and 21,500 strikes.

The Nifty Put Call ratio (PCR) stood at 1.03 on April 5, indicating a slight decline from the previous session. A PCR above 1 suggests increasing bullish sentiment, while a PCR below 0.7 indicates bearish sentiment.

Intraday Trading Strategies:

Based on the analysis provided, here are four possible intraday trading entry and exit levels for Nifty 50:

1. Long Entry: If the Nifty 50 breaches above the resistance level of 22,600, traders may consider initiating long positions with a target of 22,800. A stop-loss could be placed below the support level of 22,550.
2. Short Entry: Conversely, if the index falls below the support level of 22,300, traders may consider short positions with a target of 22,200. A stop-loss could be placed above the resistance level of 22,350.
3. Breakout Entry: A decisive breakout above the resistance of 22,800 could signal further upside momentum, warranting long positions with a target of 23,000. A stop-loss could be placed below the breakout level.
4. Reversal Entry: In case of a sharp decline below the support of 22,150, traders may anticipate a trend reversal and initiate short positions with a target of 21,900. A stop-loss could be placed above the support level.

Disclaimer:

The provided analysis and trading strategies are for informational purposes only and should not be considered as financial advice. Trading in the stock market involves risks, and individuals should conduct their own research and consult with a financial advisor before making any investment decisions. The author and publisher do not guarantee the accuracy or completeness of the information provided, and shall not be held responsible for any trading losses incurred as a result of using this information.

Nifty 50  Post Market Analysis & Pre-Open Open Interest (OI) Data Analysis – April 9

Introduction: This technical report analyzes the Pre-Open Open Interest (OI) data for April 9 to derive possible intraday levels for trading. The data is sourced from the National Stock Exchange (NSE) and is provisional. The report aims to provide insights into potential intraday trading opportunities based on OI data analysis.

Pre-Open Open Interest Data Analysis: On April 8, foreign institutional investors (FIIs) net sold shares worth Rs 684.68 crore, while domestic institutional investors (DIIs) bought Rs 3,470.54 crore worth of stocks, as per provisional data from the NSE. This indicates a mixed sentiment with FIIs showing a bearish outlook and DIIs showing bullish activity.

Analysis and Interpretation of Pre-Open Market Open Interest (OI) Data – April 9:

1. Strike Price 23000:
   • Call OI: Significant increase in OI, indicating potential resistance.
   • Put OI: Moderate OI, but meaningful put writing, suggesting support.
   • Interpretation: This level may act as a resistance-turned-support zone.
2. Strike Price 22600:
   • Call OI: Moderate OI with some call writing.
   • Put OI: Maximum OI, indicating strong support.
   • Interpretation: This level appears to be a strong support zone.
3. Strike Price 22500:
   • Call OI: Maximum call unwinding, indicating bearish sentiment.
   • Put OI: Maximum OI, suggesting strong support.
   • Interpretation: This level could serve as a significant support level.
4. Strike Price 22000:
   • Call OI: Moderate OI with some call writing.
   • Put OI: Significant OI, indicating potential support.
   • Interpretation: This level might act as a support zone.

Possible Intraday Trading Levels:

Based on the analysis above, here are four intraday trading levels with entry, exit, and stop-loss points:

1. Entry at 23000:
   • Buy: If the market breaks above 23000.
   • Exit: Target resistance at 23200.
   • Stop-loss: Below 22800.
2. Entry at 22600:
   • Buy: If the market rebounds from 22600 support.
   • Exit: Target resistance at 22800.
   • Stop-loss: Below 22500.
3. Entry at 22500:
   • Buy: If the market bounces from strong 22500 support.
   • Exit: Target resistance at 22700.
   • Stop-loss: Below 22400.
4. Entry at 22000:
   • Buy: If the market rebounds from 22000 support.
   • Exit: Target resistance at 22200.
   • Stop-loss: Below 21800.

These levels are based on the interpretation of OI data and may vary based on market dynamics. Traders are advised to adjust their positions according to real-time market movements and risk tolerance. Additionally, it’s essential to consider other factors such as overall market trend, volume, and news developments while executing trades.

Disclaimer: The information provided in this report is based on analysis of Pre-Open OI data and is for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell securities. Trading in the stock market involves risks, and individuals should conduct their own research and consult with a qualified financial advisor before making any investment decisions. The authors of this report do not accept any liability for any loss or damage arising from the use of this information. All investors are advised to exercise caution and trade responsibly.

Nifty 50 Post Market Analysis &  Expected Intra Day Trade April 10

Market Overview:

The Nifty 50 index experienced a modest decline on April 9, 2024, as profit booking ensued following a notable rally. The market reached the anticipated upward-sloping resistance trendline, achieving the targeted range of 22,750-22,800. However, the index failed to sustain its record high levels, primarily due to profit-taking activities. Despite the consolidation observed at new highs, technical analysts note the absence of a significant top reversal pattern.

Technical Analysis:

Nifty 50 encountered resistance near the crucial overhead resistance of the ascending resistance line and key Fibonacci extension levels at 22,750-22,800. The index remains near its recent highs, with immediate support identified at the 22,500 level. A decisive breach below this support could signal a short-term downward correction. Notably, the upper range of 22,750-22,800 is expected to pose a substantial hurdle in the near term.

Options Data Analysis:

Weekly options data reveals significant Call open interest at the 23,000 strike, indicating a potential key resistance level for the Nifty in the short term. Call writing was prominent at the 22,800 strike, followed by the 22,700 and 22,900 strikes. On the Put side, the 22,500 strike holds maximum open interest, serving as a crucial support level. Put writing was notable at the 22,300 strike. The Nifty Put Call ratio (PCR) declined to 1.09, signaling a shift in sentiment towards a slightly bearish stance.

Institutional Activity:

 Foreign institutional investors (FIIs) were net sellers of shares worth Rs 593.20 crore, while domestic institutional investors (DIIs) bought stocks worth Rs 2,257.18 crore on April 9, 2024, according to provisional data from the NSE.

Outlook:

The Nifty 50 index faces a critical juncture as it navigates through the resistance zone of 22,750-22,800. Further upside potential towards the 23,000 level cannot be ruled out if the index manages to breach this zone convincingly. However, failure to do so may result in consolidation or even a short-term correction, with support expected around the 22,500 level. Traders are advised to monitor developments closely and exercise caution amid ongoing market dynamics.

Intraday Trades for April 10:

Trade 1:

Instrument: Nifty 50 (Futures/Options)

Sentiment: Bullish

Entry: Long position if Nifty breaches above 22,800 levels.

Exit: Target price of 23,000.

Stop Loss: Below 22,750 levels.

Trade 2:

Instrument: Nifty 50 (Options)

Sentiment: Neutral to Bearish

Entry: Short straddle at 22,800 strike.

Exit: Close position if premium decays by 50%.

Stop Loss: Premium appreciation beyond 10%.

Trade 3:

Instrument: Bank Nifty (Futures/Options)

Sentiment: Neutral

Entry: Long position if Bank Nifty breaches above 46,000 levels.

Exit: Target price of 46,500.

Stop Loss: Below 45,800 levels.

Trade 4:

Instrument: Stock – Reliance Industries Ltd. (Cash/Options)

Sentiment: Bullish

Entry: Long position if Reliance Industries breaks out above previous day’s high.

Exit: Target price of 2,800.

Stop Loss: Below previous day’s low.

Market Sentiment Analysis:

Based on the pre-open market data, the sentiment appears to be cautiously bullish. The maximum Call open interest at the 23,000 strike indicates potential resistance, but meaningful Call writing at the 22,800 strike suggests an attempt to cap the upside. Conversely, significant Put writing at the 22,300 strike reflects an underlying support level. The maximum Put unwinding at the 22,000 strike implies a reduction in bearish bets. Overall, the market sentiment leans towards further upside potential, albeit with some consolidation expected around the current levels. Traders are advised to monitor key levels closely and adjust positions accordingly to capitalize on intraday opportunities.

Disclaimer:

This report is for informational purposes only and should not be construed as investment advice. Investors are urged to conduct their own research and consult with financial professionals before making any investment decisions. Trading in the financial markets carries inherent risks, and past performance is not indicative of future results.

Nifty 50 Market Performance  Report April 11 and Possible Trades April 12, 2024

Executive Summary:

The recent market dynamics have been characterized by a robust rebound, with indices closing above crucial resistance levels and forming a consistent pattern of higher highs and higher lows. On April 10, the BSE Sensex surged by 354 points to reach 75,038, while the Nifty 50 climbed by 111 points to attain a level of 22,754. Despite encountering moderate corrections and volatility, the overall sentiment favours the bulls.

Technical Analysis:

The Nifty is currently confronting a significant resistance barrier near the 22,800 level, delineated by the ascending resistance trend line and the 1.618 percent Fibonacci extension. However, there is a conspicuous absence of noteworthy reversal signals at this juncture, indicating the potential for further upward movement if the index decisively breaches the 22,800 mark. Immediate support is anticipated around the 22,615 level. While a high wave type candle pattern has emerged amidst sideways trading, its predictive value remains constrained within the prevailing context.

Options Data Analysis:

Analysis of weekly options data reveals that the 22,800 strike holds the highest Call open interest, closely followed by the 23,000 strike, signifying these levels as pivotal resistance zones. Conversely, substantial open interest is observed at the 22,700 strike on the Put side, serving as a critical support level. The Put Call ratio (PCR) surged to 1.32 on April 10, indicating an escalating bullish sentiment in the market.

Volatility and Institutional Activity:

olatility, as gauged by the India VIX, has receded to a 5-month nadir, bolstering the prevailing bullish outlook. Foreign institutional investors (FIIs) continued to exhibit a net buying stance, while domestic institutional investors (DIIs) also participated in buying activities, further bolstering the positive market sentiment.

Expected Trade for April 12, 2024:

Given the prevailing bullish momentum and the potential for a decisive breach of the 22,800 resistance level, a bullish stance is recommended for April 12 trading. Traders are advised to contemplate initiating long positions if the Nifty sustains above 22,800, with a target set at the psychologically significant level of 23,000. However, prudently monitoring market developments, especially in proximity to key support and resistance levels, is strongly advocated. Embracing a strategy of buying on dips and selling on rallies, as advocated by Rupak De, with the implementation of appropriate stop-loss measures, could prove to be an effective approach within the current range-bound market environment.

On the Basis of Nifty 50 Pre-Open OI data  four potential intraday trade :

Intraday Call Option Trade:

1. Strike: 23000 (Maximum Call Unwinding)
2. Trade Type: Buy Nifty Call Option
3. Entry: Enter the trade if Nifty starts to move upwards and breaches a resistance level, indicating a bullish momentum continuation.
4. Exit: Exit the trade when Nifty reaches a resistance level or shows signs of reversal.
5. Stop Loss: Place a stop-loss below the recent swing low or a certain percentage below the entry point.
6. Intraday Put Option Trade:
   • Strike: 22700 (Meaningful Put Writing)
   • Trade Type: Buy Nifty Put Option
   • Entry: Enter the trade if Nifty shows weakness and approaches the support level around 22700, indicating a potential bounce.
   • Exit: Exit the trade when Nifty rebounds from the support level or reaches a predefined target.
   • Stop Loss: Place a stop-loss below the support level or a certain percentage below the entry point.
7. Intraday Short Trade:
   • Strike: 23300 (Meaningful Call Writing)
   • Trade Type: Short Sell Nifty Futures or Sell Nifty Call Option
   • Entry: Enter the trade if Nifty faces resistance near the 23300 level and starts to show signs of reversal.
   • Exit: Exit the trade when Nifty breaks below a support level or shows signs of upward momentum.
   • Stop Loss: Place a stop-loss above the recent swing high or a certain percentage above the entry point.
8. Intraday Long Trade:
   • Strike: 22400 (Maximum Put Unwinding)
   • Trade Type: Buy Nifty Futures or Buy Nifty Put Option
   • Entry: Enter the trade if Nifty approaches the support level around 22400 and starts to show signs of rebounding.
   • Exit: Exit the trade when Nifty reaches a resistance level or shows signs of reversal.
   • Stop Loss: Place a stop-loss below the recent swing low or a certain percentage below the entry point.

These trade levels should be adjusted according to intraday market dynamics, price action, and individual risk tolerance. It’s essential to monitor the market closely and adapt the trades accordingly to manage risk effectively.

Disclaimer:

The information provided in this report is intended solely for educational and informational purposes and should not be construed as investment advice. Engaging in trading activities within financial markets carries inherent risks, and individuals are strongly encouraged to conduct their own comprehensive research and seek counsel from qualified financial advisors prior to making any investment decisions. The author and the organization bear no liability for any trading losses incurred as a result of actions taken based on the information provided herein.