Nifty Option

• admin
• June 9, 2024

Market Overview

The market witnessed a remarkable recovery in the last three days, following a significant sell-off on the election results day. The Nifty 50 index surged, closing with a 469-point gain at 23,290 on Friday, June 7. This bullish sentiment is attributed to the BJP-led NDA forming the government for the third time.

Key Levels to Watch

• Resistance Levels: The 24,000 strike holds the maximum open interest with 91.5 lakh contracts, indicating a strong resistance level for the Nifty in the short term. Additional resistance levels are identified at the 24,500 strike (49.32 lakh contracts) and the 23,500 strike (40.26 lakh contracts).
• Support Levels: On the downside, the 23,000 strike, with 56.21 lakh contracts, acts as a significant support level. Further support is seen at the 22,000 strike (45.85 lakh contracts) and the 22,500 strike (34.99 lakh contracts).

Open Interest (OI) Data Analysis

• Call Options:
  • The 24,000 strike saw the maximum Call writing with an addition of 27.23 lakh contracts, followed by the 24,500 strike with 17.55 lakh contracts, and the 23,700 strike with 13.4 lakh contracts.
  • Maximum Call unwinding occurred at the 22,800 strike, shedding 5.71 lakh contracts, followed by the 22,700 strike (3.6 lakh contracts) and the 22,600 strike (99,075 contracts).
• Put Options:
  • The highest Put writing was at the 23,000 strike, with an addition of 46.74 lakh contracts, followed by the 23,200 strike (22.96 lakh contracts) and the 22,000 strike (20.55 lakh contracts).
  • Put unwinding was observed at the 24,000 strike, shedding 7,350 contracts, followed by the 24,400 strike, which shed 75 contracts.

Market Sentiment Indicators

• Put-Call Ratio (PCR): The PCR rose to 1.15 on June 7 from 1.03 in the previous session, indicating a bullish sentiment as traders are selling more Put options than Call options.
• Volatility Index (India VIX): After peaking at a two-year high of 31.71 on June 4, the volatility index dropped significantly to 16.88 on June 7. This decline in volatility suggests a more stable market environment favorable to the bulls.

Possible Market Moves for June 10

Given the current data and market sentiment, the following moves are anticipated for June 10:

1. Bullish Continuation: If the Nifty 50 sustains above the support levels of 23,000-22,900, it is likely to climb towards the 23,400-23,500 levels. The strong bullish sentiment and reduced volatility provide a conducive environment for further gains.
2. Resistance Testing: The index may face resistance around the 24,000 level due to the high open interest at this strike. A successful breach of this level could pave the way towards 24,500.
3. Downside Risks: If the Nifty fails to hold the 23,000 support level, it might witness a correction towards the 22,900-22,800 levels. The key support at 23,000, with significant open interest, will be crucial in maintaining the bullish trend.

Conclusion

The Nifty 50 index shows strong bullish potential with key support at 23,000 and potential upside towards 23,400-23,500 levels. However, traders should watch for resistance around 24,000 and monitor the PCR and volatility index for any shifts in market sentiment.

Disclaimer

The information provided in this report is for educational and informational purposes only and should not be construed as financial or investment advice. The analysis and opinions expressed herein are based on historical data and market conditions as of the date of publication and are subject to change without notice. Trading and investing in financial markets involve substantial risks, including the risk of losing some or all of your investment. Past performance is not indicative of future results. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any losses or damages that may arise from the use of this report.

Market Report: June 10, 2024

Overview:

On June 10, 2024, Indian stock markets experienced a slight decline following three consecutive sessions of gains. This downturn occurred as investors awaited further details on the new panel of ministers and their portfolios, announced after Prime Minister Narendra Modi’s recent swearing-in ceremony. Additionally, market participants were cautious ahead of the upcoming US inflation data release and the Federal Reserve’s policy meeting scheduled for June 12, which is expected to provide updates on economic projections and interest rate expectations.

Indices Performance:

NSE Nifty 50 Index: Fell by 0.13% or 30.95 points, closing at 23,259.20.

BSE Sensex: Declined by 0.27% or 203.28 points, ending the session at 76,490.08.

Sectoral Indices:

Gainers:

Nifty Metal: Rose by 1.9%, marking the largest sectoral gain.

Nifty Realty: Increased by 1.3%.

Nifty Pharma: Gained 1%.

Nifty Consumer Durables: Up by 0.7%.

Nifty Healthcare: Also up by 0.7%.

Losers:

Nifty IT Index: Fell by 1.8%, the most significant decline among sectoral indices.

Market Sentiment and Investor Behavior:

The market currently lacks fresh catalysts following the formation of the new government at the Centre. This suggests that some consolidation may occur in the near term.

Institutional flows exhibit a mixed trend:

Foreign Institutional Investors (FIIs): Gradually covering their short positions.

Domestic Institutional Investors (DIIs): Booking profits after the market reached historic highs.

Global Influences:

US Economic Data: Investors are keenly awaiting the US inflation data and the Federal Reserve’s policy meeting outcomes. These events will reveal whether the Fed’s views align with market expectations regarding potential interest rate cuts.

Federal Reserve’s Stance: There is a growing sentiment that the US Federal Reserve may maintain its current policy stance, given the healthy state of US economic data. Any indication of a dial-back on the previously guided rate cut could test market patience.

Pre-Open Market Analysis: June 11, 2024

Options Data Analysis:

Resistance Levels:

24,000 Strike: Highest Call Open Interest (OI) at 4,94,329 contracts, indicating strong resistance at this level. The maximum OI writing of 1,28,319 contracts further reinforces this level as a significant resistance point.

25,000 Strike: Second highest Call OI at 3,52,582 contracts.

24,500 Strike: Significant Call OI at 2,96,410 contracts and notable Call Unwinding at -41,926 contracts, suggesting some reduction in bearish sentiment but still a strong resistance level.

Support Levels:

23,000 Strike: Highest Put Open Interest (OI) at 2,66,202 contracts, indicating strong support.

22,000 Strike: Second highest Put OI at 2,40,407 contracts, with maximum OI writing of 57,002 contracts, further supporting this level as a strong support zone.

22,500 Strike: Significant Put OI at 1,79,144 contracts, reinforcing it as another support level.

Unwinding Data:

24,800 Strike: Maximum Call Unwinding at -41,926 contracts, suggesting a reduction in resistance at this level.

20,150 Strike: Maximum Put Unwinding at -57,593 contracts, indicating a decrease in support at this level.

Conclusion:

Resistance Levels: 24,000, 24,500, 25,000.

Support Levels: 23,000, 22,000, 22,500.

These levels provide key indicators for traders to monitor in the upcoming trading sessions. The strong resistance around 24,000 and 25,000 strikes and robust support around 23,000 and 22,000 strikes are crucial for market movements.

Source: NSE India

Outlook:

In the absence of new domestic catalysts, the Indian market is likely to see some consolidation. The mixed trend in institutional flows and diminishing optimism about a rate cut amid strong US economic data suggest a cautious approach in the near term. Investors will closely monitor global cues, particularly the Federal Reserve’s upcoming announcements, to gauge the market direction.

Conclusion:

The Indian markets experienced a slight pullback on June 10, 2024, as investors await more clarity on domestic political developments and key US economic data. While some sectors showed resilience, the overall market sentiment remains cautious, with potential consolidation expected in the near term.

Disclosures:

The data provided is based on the pre-open market analysis from the NSE option chain as of June 11, 2024. This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions. The market is subject to various factors, and past performance is not indicative of future results.

Nifty 50 OI Data Analysis June 12

Post-Market Analysis – June 11

In yet another volatile trading session, the market closed with minimal change on June 11, with the Nifty finishing at 23,264.80. Despite opening with slight gains, the Nifty index experienced consolidation throughout the session. However, last-hour buying efforts helped it inch closer to the 23,400 level. Ultimately, it closed 5.60 points higher at 23,264.80 compared to the previous close.

Sectoral Performance:

• Nifty Media: The Nifty Media index emerged as the top gainer, adding nearly 2%.
• Nifty Realty: This sector also saw a positive movement, rising by 1%.
• Nifty Auto: The auto index gained 0.8%.

Conversely, selling pressure was noted in:

• Banking Sector
• FMCG Sector
• Pharma Sector

Nifty Midcap 100: The Nifty Midcap 100 index hit a fresh intraday record high of 53,880.50 but ended the session 0.77% higher at 53,647.55.

Technical Analysis: The Nifty’s movement on June 11 was characterized by choppy behavior at the resistance level of 23,400. The session closed with a minor positive note, forming a small negative candle on the daily chart with an upper shadow. This pattern, observed after a recent sharp upmove, has appeared in the last two sessions. According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, such formations indicate the possibility of a minor downward correction in the short term.

OI Data  Analysis and Identifying Resistance and Support Levels for June 12

Based on the pre-open market data for June 12:

Resistance Levels

1. Highest Call Open Interest (OI) at 24,000: The highest call open interest indicates significant resistance at this level, with 6,67,295 contracts. This level is likely to be a strong resistance point as many traders are betting the market won’t go above this level.
2. Significant Call Writing at 24,000: Maximum call writing (1,72,966 contracts) at this strike further strengthens the resistance at the 24,000 level.

Support Levels

1. Highest Put Open Interest (OI) at 22,500: The highest put open interest at 22,500 with 3,09,014 contracts suggests a strong support level. Traders are betting that the market will not fall below this level.
2. Significant Put Writing at 22,500: Maximum put writing (1,29,870 contracts) at this strike reinforces the support level at 22,500.

Summary

• Resistance Level: 24,000
• Support Level: 22,500

These levels are key indicators based on the option open interest data and should be closely monitored during the trading session on June 12.

Conclusion: The market’s indecisiveness, coupled with sectoral mixed performances and technical patterns, suggests that traders should brace for potential minor corrections in the upcoming sessions. Keeping a close eye on key levels and market trends will be crucial for navigating this volatile phase.

Disclaimer

The information provided in this post-market analysis is for educational and informational purposes only and should not be construed as financial or investment advice. The content is based on data and analysis available at the time of writing and may not reflect current market conditions. Investing in the stock market involves risk, including the potential loss of principal. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. The views and opinions expressed in this analysis are those of the analysts cited and do not necessarily reflect the views of the author or the publisher.

Technical Report on Market Performance and Projections June-13

Market Overview (June 12, 2024)

The broader markets outperformed the benchmark indices today, with the BSE Smallcap and Midcap indices rising over 1 percent. The Nifty 50 ended higher, closing at 23,308 after hitting an intraday high of 23,441, and the Sensex closed at 76,606, up 149 points or 0.2 percent. Investor optimism following the recent cabinet swearing-in and the positive allocation of ministry portfolios contributed significantly to the market’s surge. The sentiment was further bolstered by expectations of continuing key economic reforms.

Key Performers:

• Gainers: Coal India, Power Grid, Eicher Motors, and SBI Life.
• Losers: M&M, Britannia, HUL, Tata Consumer Products, and Titan.

Sectoral Performance:

• Top Gainers: Nifty Media (+2%), Nifty PSU Bank (+1%)
• Top Loser: Nifty FMCG (-0.4%)

Volatility Index: The India VIX fell over 2 percent to 14, marking its third consecutive day of decline.

Technical Analysis

Resistance and Support Levels

Nifty 50:

• Resistance Levels:
  • Immediate resistance at 23,450. A break above this level could see the index reaching towards 23,600 and beyond.
  • Major resistance lies at 23,600. A breach of this level could signal a strong bullish trend continuation.
• Support Levels:
  • Immediate support at 23,200. A close below this level could lead to a correction towards the 23,100 and 23,000 levels.
  • Strong support is observed at 23,000. A fall below this level might trigger further downside momentum.

Sensex:

• Resistance Levels:
  • The key resistance level to watch is 77,079. A close above this level could lead to a new all-time high.
• Support Levels:
  • Immediate support is around 76,300. A breach below this level could result in a decline towards 76,000.

Market Outlook for June 13, 2024

Mandar Bhojane, Research Analyst, Choice Broking: The Nifty made an all-time high at the 23,441.95 level but ended at the day’s low at 23,322.95, indicating potential volatility. The market may remain sideways and volatile within the 23,200 to 23,450 range. Key levels to watch are:

• Bearish Scenario: A close below 23,200 could lead to further correction down to the 23,100 and 23,000 levels.
• Bullish Scenario: A close above 23,450 could push the index towards a new high near 23,600.

Vinod Nair, Head of Research, Geojit Financial Services: Global markets remain largely positive ahead of the US inflation data and FOMC meeting. Expectations of stable US inflation and potential rate cuts are crucial for future market direction. The domestic market, trading at new highs, is buoyed by expectations of a growth-focused final budget, supported by the RBI’s upgraded GDP growth forecast.

Disclaimer

This report is for informational purposes only and does not constitute investment advice. The analysis and projections are based on historical data and market conditions as of June 12, 2024. Market conditions are subject to rapid changes, and past performance is not indicative of future results. Investors should conduct their own research or consult with a qualified financial advisor before making investment decisions. Neither the author nor the affiliated institutions accept any liability for any losses or damages arising from the use of this report.