Nifty Option

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• August 18, 2024

Nifty 50 OI Data Analysis August-19

Post-Market Analysis – August 16, 2024

On August 16, the Nifty 50 experienced a significant rebound, rising by 1.7% to close decisively above the 24,500 level. This marks a notable shift after a period of consolidation over the past few weeks. The index’s ability to sustain above this level indicates a potential bullish phase, with 24,700 emerging as the immediate resistance, representing the upper boundary of the bearish gap formed on August 5. Support levels are identified at the 24,300-24,200 range, which will be crucial for maintaining upward momentum.

The Nifty formed a long bullish candlestick pattern with a lower shadow on the daily charts, signaling positive sentiment. Additionally, the index overcame the lower high-lower low formation seen in previous sessions and climbed above the middle band of the Bollinger Bands. On the weekly charts, it also invalidated the lower high-lower low pattern and stayed above the 10-week EMA for the 14th consecutive week.

OI Data Analysis for August 19, 2024

Maximum Open Interest (OI):

Call Options: Highest at the 25,000 strike with 72.78 lakh contracts, followed by 25,500 (46.98 lakh) and 24,900 (36.8 lakh).

Put Options: Highest at the 23,500 strike with 51.13 lakh contracts, followed by 24,500 (44.16 lakh) and 24,000 (42.91 lakh).

Maximum Call Writing: 25,000 Strike: 20.15 lakh contracts, 25,500 Strike: 18.09 lakh contracts, 24,900 Strike: 18.04 lakh contracts

Maximum Call Unwinding: 24,200 Strike: 16.1 lakh contracts, 24,100 Strike: 7.01 lakh contracts, 24,300 Strike: 6.02 lakh contracts

Maximum Put Writing: 24,500 Strike: 35.68 lakh contracts, 23,500 Strike: 34.58 lakh contracts,24,400 Strike: 33.30 lakh contracts

Maximum Put Unwinding: Minimal or not observed in the provided data.

Market Sentiment for August 19, 2024

The Nifty’s strong rebound and closing above significant levels are indicative of a bullish sentiment. The increase in the Put-Call Ratio (PCR) to 1.31 from 1.14 suggests a firming up of bullish sentiment, as traders are predominantly writing Put options. This reflects growing confidence in the market’s upward movement. Additionally, the decline in volatility, with the India VIX dropping to 14.4, reinforces the favorable conditions for the bulls.

Resistance and Support Levels

Resistance Levels:

Pivot Points: 24,574, 24,659, and 24,796

Key Resistance: 24,700 (upper end of the bearish gap from August 5)

Support Levels:

Pivot Points: 24,299, 24,214, and 24,077

Key Support: 24,300-24,200 range

Recommendation and Suggestion

Given the Nifty’s current technical and sentiment indicators, the market appears poised for further gains if it sustains above the 24,500 level. Traders should watch for potential resistance at 24,700. If the index holds above this resistance, further upside may be anticipated. Conversely, the 24,300-24,200 range remains a critical support zone. Monitoring these levels closely will be crucial for positioning strategies.

For Bullish Traders: Consider holding long positions or adding to existing ones if the index maintains above 24,500 and approaches the 24,700 resistance.

For Bearish Traders: Be cautious and consider protective measures or hedging strategies if the index fails to sustain above 24,500.

Disclaimer

This report is for informational purposes only and does not constitute financial advice. Readers should conduct their own research and consult with a financial advisor before making any investment decisions. The market conditions are subject to change, and past performance is not indicative of future results.

Nifty 50 Pre- Open OI Data Analysis

Post-Market Analysis: August 19, 2024

On August 19, the Nifty 50 began the trading session on a strong note, gaining around 100 points, but remained consolidative throughout the day. The index finally closed flat with a positive bias, maintaining its position above the 24,500-24,550 support area. The formation of a bearish candlestick pattern on the daily charts indicated caution, yet the higher highs-higher lows structure suggested underlying strength. The index also stayed above all key moving averages and the middle band of the Bollinger band, which are positive technical indicators.

Pre-Open OI Data Analysis: August 20, 2024

The options data provides insight into the expected market movement for the upcoming session. The maximum open interest (OI) on the Call side is concentrated at the 25,000 strike, with 91.73 lakh contracts, suggesting a strong resistance level at this point. Other significant resistance levels are seen at the 24,600 and 24,800 strikes, with substantial Call writing observed at these levels.

On the Put side, the 24,000 strike holds the maximum open interest with 58.46 lakh contracts, marking a key support level. The 23,900 strike also shows strong support with significant Put writing. The Put-Call ratio (PCR) fell to 1.17, down from 1.31 in the previous session, indicating a slight decline in bullish sentiment, though the market remains largely optimistic.

Resistance and Support Levels for August 20, 2024

Resistance Levels: R1: 24,622 (Pivot), R2: 24,650 (Pivot), R3: 24,694 (Pivot)

Key Resistance: 25,000 (Maximum OI on Calls)

Support Levels: S1: 24,534 (Pivot), S2: 24,507 (Pivot),S3: 24,462 (Pivot)

Key Support: 24,000 (Maximum OI on Puts)

Market Sentiment Analysis for August 20, 2024

The overall market sentiment remains cautiously bullish. The Nifty 50’s ability to sustain above the critical 24,500-24,550 zone is a positive sign, potentially leading to further consolidation towards the 24,700-24,800 area in the coming sessions. The decline in the India VIX to 14.32, along with sustained low volatility, suggests that market participants are not expecting significant downside risk in the immediate term.

However, the bearish candlestick formation coupled with the decline in the Put-Call ratio points to a possible consolidation phase with mixed market sentiments. Traders should watch for any break below the 24,500 support zone, which could trigger a short-term correction towards the 24,300 area.

Conclusion and Recommendation

Given the current technical indicators and options data, the market is expected to remain in a consolidative phase with a positive bias. The Nifty 50’s sustained position above key support levels suggests limited downside risk, while resistance near the 24,700-25,000 zone may cap the upside in the short term. Traders should consider holding long positions with a stop-loss below 24,500, while booking profits near 24,700-25,000. Short-term traders may explore opportunities based on the support and resistance levels outlined, with a focus on managing risk.

Disclaimer

This report is for informational purposes only and does not constitute financial advice. Investors should perform their own research and consult with a financial advisor before making any trading decisions. The views expressed in this report are based on the analysis of publicly available information and may not reflect the most recent market conditions. All investments carry inherent risks, and past performance is not indicative of future results.

Nifty 50 Pre-Open OI Data Analysis August  21

Post Market Analysis – August 20

The Nifty 50 index extended its upward momentum for the fourth consecutive session, closing at 24,699, an increase of 126 points. This move successfully filled the bearish gap that was created on August 5. The session witnessed a positive bias, supported by the Relative Strength Index (RSI) moving in the upward direction, signaling continued strength in the current trend.

Notably, the Nifty 50 maintained a higher highs-higher lows formation for the third consecutive session, indicating strong bullish sentiment. The index also formed a bullish candlestick pattern with minor upper and lower shadows on the daily charts, reflecting controlled volatility during the session. Moreover, the index managed to sustain above the upward-sloping resistance trendline and remained comfortably above all key moving averages, further reinforcing the bullish outlook.

Pre-Open Open Interest (OI) Data Analysis – August 21

According to the weekly options data, the maximum open interest was observed at the 25,000 strike, with 94.35 lakh contracts, marking this level as a significant resistance in the short term. This was followed by the 25,500 strike with 54.19 lakh contracts and the 24,700 strike with 43.93 lakh contracts.

Maximum Call writing activity was seen at the 24,700 strike, which added 10.55 lakh contracts, indicating resistance at this level. This was followed by the 24,900 and 25,500 strikes, which added 4.48 lakh and 3.42 lakh contracts, respectively. On the other hand, significant Call unwinding occurred at the 24,600 strike, which shed 30.97 lakh contracts, suggesting reduced resistance pressure at this level.

On the Put side, the 24,300 strike saw the maximum open interest with 71.38 lakh contracts, establishing it as a key support level. This was followed by the 24,500 and 24,000 strikes with 56.13 lakh and 55.59 lakh contracts, respectively. The maximum Put writing was recorded at the 24,300 strike, with an addition of 33.4 lakh contracts, followed by the 24,700 and 24,600 strikes, which added 32.71 lakh and 14.56 lakh contracts, respectively. The 23,900 strike witnessed the highest Put unwinding, shedding 33.87 lakh contracts.

The Nifty Put-Call Ratio (PCR) increased to 1.27 on August 20 from 1.17 in the previous session, indicating a stronger bullish sentiment as traders sold more Put options compared to Call options. This elevated PCR suggests that the market may continue to experience upward momentum.

Resistance and Support Levels

Based on pivot point analysis, the following resistance and support levels have been identified:

• Resistance Levels: 24,729, 24,759, 24,807
• Support Levels: 24,632, 24,602, 24,553

Conclusion and Recommendations

The Nifty 50’s continued upward trajectory, coupled with strong technical indicators and supportive open interest data, suggests that the index is likely to challenge the 24,800-24,900 range in the coming sessions. However, traders should remain cautious of potential resistance at the 25,000 strike, which has the highest open interest and could act as a significant barrier to further gains.

Key support levels are identified at 24,500 and 24,300, which should provide a cushion in case of any downward movement. The sustained lower volatility, as indicated by the falling India VIX, continues to favor the bulls, suggesting that the current trend is likely to persist.

Disclaimer

This analysis is based on the current market conditions and is intended for informational purposes only. It does not constitute investment advice, and investors should consult their financial advisors before making any trading decisions. The stock market is subject to risks, and past performance is not indicative of future results.

Nifty 50 Sentiments – August 22, 2024

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Post-Market Analysis (August 21, 2024)

The Nifty 50 index extended its bullish streak for the fifth consecutive session, closing with a gain of 71 points at 24,770 on August 21, 2024. This positive performance was marked by the formation of a bullish candlestick pattern on the daily timeframe, reinforcing the ongoing uptrend. The index displayed a higher highs, higher lows formation for the fourth consecutive session, maintaining its position above all key moving averages. Furthermore, Nifty 50 sustained above the middle band of the Bollinger band, indicating a strong continuation of momentum.

Momentum indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) reflected a positive bias, supporting the bullish sentiment. The sustained decrease in volatility, with the India VIX dropping by 3.53% to 13.33, further added to the optimism in the market. The volatility index’s level below 14 continues to favour the bulls, with 14.6 being a key threshold that could signal a shift in momentum if breached.

Pre-Open Open Interest (OI) Data Analysis (August 22, 2024)

The weekly options data indicates a concentrated buildup in the 25,000 strike, with the maximum open interest of 1.21 crore contracts, identifying this level as a significant resistance in the short term. Following closely are the 24,800 strike (68.53 lakh contracts) and the 25,500 strike (63.93 lakh contracts). Notably, the highest Call writing occurred at the 24,800 strike, adding 27.71 lakh contracts, followed by the 25,000 and 25,100 strikes.

On the downside, the 24,500 strike remains the critical support level with the maximum open interest of 78.14 lakh contracts. This is followed by the 24,700 strike (75.74 lakh contracts) and the 24,300 strike (67.52 lakh contracts). The highest Put writing was observed at the 24,700 strike, adding 37.72 lakh contracts, reinforcing the significance of this level as near-term support.

The Nifty Put-Call ratio (PCR) marginally decreased to 1.24 on August 21, from 1.27 in the previous session, reflecting a slight reduction in bullish sentiment. However, a PCR above 1 typically continues to suggest a bullish outlook.

Probable Resistance and Support Levels

• Immediate Resistance:  24,788, 24,820, 24,871
• Key Resistance:  25,000 (Maximum OI at 25,000 strike)
• Immediate Support:  24,700 , 24,500 (Maximum OI at 24,500 strike)
• Critical Support: 24,300

Conclusion and Recommendation

The Nifty 50’s bullish momentum is expected to continue as long as it remains above the 24,700 level in the coming sessions. The 25,000 strike, with the maximum open interest, will be a critical resistance level to monitor. Traders should be cautious of a possible shift in sentiment if the index fails to sustain above the 24,700 support level or if the India VIX begins to rise above the 14.6 mark.

Given the current market conditions, a cautious long position may be advisable with tight stop-loss orders at the 24,500 support level. Monitoring the open interest changes in real-time will be crucial for adapting to any shifts in market sentiment.

Disclaimer

This report is for informational purposes only and does not constitute financial advice. The analysis provided is based on data and interpretations available at the time of writing and is subject to change with market conditions. Investors are encouraged to conduct their own research or consult a financial advisor before making any trading decisions. Neither the author nor the associated entities accept any liability for losses incurred based on this report.

Nifty 50  Sentiment for August 23

Post-Market Analysis for August 22

The market closed the August 22 session on a positive note, continuing its upward trajectory for the sixth consecutive day. The Nifty 50 index rose by 41 points to close at 24,812, despite a rangebound trading session. The formation of higher highs and higher lows has been consistent, signaling ongoing bullish momentum. Momentum indicators like the RSI and MACD also suggest a positive bias, reinforcing the upward trend.

A notable observation is the formation of a bearish candlestick pattern on the daily charts, indicating that the closing level was lower than the opening. Despite this, the market’s ability to maintain a higher tops-higher bottoms formation is a positive sign. The index sustained above all key moving averages, including the middle band of the Bollinger Band, indicating continued strength.

The decline in volatility, as indicated by the India VIX dropping by 2.49% to 13, its lowest since August 1, further boosted bullish sentiment.

Pre-Open OI Data Analysis for August 23

The monthly options data reveals that the 26,000 strike holds the maximum open interest, with 64.74 lakh contracts, marking it as a significant resistance level. This is followed by the 25,000 and 25,500 strikes, with 53.56 lakh and 51.34 lakh contracts, respectively.

On the Call side, there was significant writing at the 26,000 strike, with an addition of 23.51 lakh contracts. The 25,500 and 25,300 strikes also saw notable additions. On the other hand, the maximum Call unwinding occurred at the 24,500 strike, which shed 1.2 lakh contracts.

For Puts, the 24,000 strike continues to be the most significant support level, with 71.59 lakh contracts. The 24,500 and 24,700 strikes follow, providing additional support levels. Noteworthy Put writing was observed at the 24,800, 24,700, and 24,500 strikes.

The Nifty Put-Call ratio (PCR) increased to 1.4, up from 1.24 in the previous session, indicating a stronger bullish sentiment as traders are selling more Put options than Calls.

Resistance and Support Levels

Resistance Levels: Based on pivot points: 24,853, 24,872, and 24,904. , Major resistance at 26,000 based on maximum open interest.

Support Levels: Based on pivot points: 24,789, 24,770, and 24,738, Immediate support at 24,600, Sacrosanct support at 24,500.

Conclusion and Recommendation

Given the current market dynamics, the overall sentiment remains bullish, supported by the continuation of the higher tops-higher bottoms pattern, declining volatility, and strong momentum indicators. However, caution is advised due to the bearish candlestick formation and the significant resistance around the 25,000 and 26,000 levels.

For traders:

• Long Positions: Continue holding long positions with a close watch on the 24,600 support level. Any sustained move above 24,800 could push the index towards the 24,950-25,000 zone.
• Short Positions: Consider shorting if the index fails to sustain above 24,800, with tight stop losses around the 24,500 support level.

Disclaimer

The above analysis is for informational purposes only and does not constitute financial advice. Market conditions can change rapidly, and traders are advised to do their own research or consult with a financial advisor before making any trading decisions.