Nifty 50 Pre-Open OI Data Analysis October-21
Post-Market Analysis (October 18)
On October 18, the Nifty 50 index witnessed a significant recovery after a three-day weakness, with the bulls gaining control and pushing the index up by 104 points to close at 24,850. Intraday, the Nifty 50 dipped close to its 20-week Exponential Moving Average (EMA) of 24,550 before bouncing back. The index held above the critical support level of 24,670, which is the neckline of the Head and Shoulders pattern, and the 20-week EMA, a positive sign for market sentiment. However, despite this recovery, the formation of lower tops and bottoms continued, indicating the market’s cautious approach.
On the technical front, the Nifty formed a bullish candlestick pattern on the daily charts, though it remained below the 20- and 50-day EMAs and traded near the lower band of the Bollinger Band. On the weekly charts, a High Wave pattern signaled volatility. The immediate resistance levels are at 25,000 and 25,200, while support is positioned at 24,550. The key concern is that a decisive close below 24,670 could trigger further selling pressure.
Technical Setup at the End of the Day (October 18)
- Bullish Candlestick Pattern: On the daily chart, Nifty 50 formed a bullish pattern, signaling a potential upward movement.
- Lower Tops and Bottoms: The index continued to form lower highs and lower lows for the third consecutive session, suggesting persistent bearish sentiment.
- 20-Week EMA Support: Nifty tested and held above its 20-week EMA at 24,550, a critical level for market stability.
- Bollinger Band: Nifty traded near the lower band of the Bollinger Band, indicating that the market is approaching an oversold region.
- High Wave Pattern: A High Wave candlestick pattern was noted on the weekly charts, reflecting heightened volatility in the coming sessions.
Market Sentiments at the Close (October 18)
The market sentiment improved as the India VIX dropped 2.61%, settling at 13.04 from 13.39. Lower volatility favors bulls, providing confidence for the upcoming sessions. Additionally, the Put-Call Ratio (PCR) increased to 0.93 from 0.88, indicating that traders were selling more Put options, which is typically a sign of a bullish outlook. However, caution is advised since the [DT1] Nifty remains in a downtrend with lower highs-lower lows.
Pre-Open OI Data Analysis (October 21)
Open Interest (OI) data as of October 21 reveals key levels that could act as strong support and resistance:
- Key Resistance Levels:
- The 25,000 strike holds 52.52 lakh contracts, indicating significant resistance around this level.
- The 26,000 strike has the maximum open interest at 57.19 lakh contracts, acting as a strong resistance in the near term.
- Call writing at the 25,400 (13.64 lakh contracts) and 25,500 (12.14 lakh contracts) levels further emphasizes the resistance.
- Key Support Levels:
- Immediate support is visible at the 24,670 neckline of the Head and Shoulders pattern.
- Based on pivot points, support levels are positioned at 24,648, 24,573, and 24,451.
- A decisive break below these support levels may invite further selling pressure.
Resistance and Support Levels
Resistance Levels: 5,000 (Immediate),25,200, 25,400 and 25,500 (Call Writing Activity)
Support Levels:24,670 (Head and Shoulders neckline),24,550 (20-week EMA),24,451 (Pivot Support)
Conclusion and Recommendation
The Nifty 50’s ability to hold above the 24,670 support and the 20-week EMA is a positive signal. However, the continuation of lower tops and bottoms, coupled with resistance near 25,000, suggests that a cautious approach is warranted. Traders should monitor the 24,670 level closely as a breach of this support could lead to accelerated selling pressure. On the upside, a decisive break above 25,000 could open the door for further gains, but sustained resistance at 25,200 may limit short-term upside potential.
In the options market, the PCR stands at 0.93, indicating a slight bullish tilt, while the India VIX’s decline reflects lower volatility, which is favorable for bulls. Still, the market remains vulnerable to fluctuations, especially with the formation of a High Wave pattern on the weekly charts.
Recommendations:
- Bullish Strategy: Hold long positions with a stop-loss at 24,670, targeting 25,000 and 25,200 in the near term.
- Bearish Strategy: If Nifty closes below 24,670, consider initiating short positions targeting 24,550 and 24,450.
Disclaimer
This report is for educational purposes only and does not constitute financial advice. Please consult a professional financial advisor before making any investment decisions. Trading in the financial markets involves substantial risk, and you should be aware of all risks before trading. Past performance is not indicative of future results.
Nifty 50 Pre-Open OI Data Analysis October-22
Post Market Analysis – October 21
On October 21, the Nifty 50 index failed to sustain the previous session’s upward momentum, declining by 73 points to close at 24,781. This marked a day of range-bound trading with negative market breadth, indicating broader market weakness. The index continued to trade below the 20- and 50-day Exponential Moving Averages (EMAs), a bearish signal that suggests sustained weakness in the near term unless these levels are reclaimed.
The overall sentiment was bearish as the index formed a bearish candlestick pattern on the daily chart, with the 10-day EMA falling below the 50-day EMA, signaling short-term weakness. Momentum indicators also remained negative across daily and weekly timeframes, further supporting the likelihood of continued downward pressure.
Technical Setup at the End of the Day
- The Nifty 50 traded below critical moving averages, including the 20- and 50-day EMAs. A decisive move above these levels could restore bullish momentum, but as long as the index remains below them, weakness and range-bound movement may persist.
- On the daily chart, the index formed a bearish candlestick pattern, indicating potential downside risk.
- Momentum indicators (RSI, MACD) continued to show bearish signals, with the RSI staying below 50 and the MACD line crossing below the signal line.
- The index also fell below the 20-week Simple Moving Average (SMA) at 24,700 but managed to defend it on a closing basis.
Market Sentiment at the End of the Day
- The overall sentiment in the market was bearish, with the India VIX, often referred to as the fear gauge, rising by 5.56 percent to 13.76, reflecting heightened volatility. A sustained rise in volatility could further unsettle the bulls.
- The Put-Call Ratio (PCR) fell to 0.81 from the previous session’s 0.93, signaling an increase in bearish sentiment as traders increased their Call writing activities compared to Put writing.
Pre-Open OI Data Analysis – October 22
- Maximum Open Interest (OI) on the Call side: The 26,000 strike holds the maximum OI at 58.62 lakh contracts, serving as a strong resistance level in the short term, followed by the 25,000 and 25,500 strikes.
- Maximum Open Interest on the Put side: The 24,500 strike with 42.12 lakh contracts acts as a significant support level, followed by the 24,000 strike.
- Call Writing: The highest Call writing was seen at the 25,000 strike, adding 7.16 lakh contracts, followed by the 25,200 and 24,800 strikes.
- Put Writing: The 24,000 strike saw the highest addition on the Put side, adding 3.08 lakh contracts, indicating strong support at this level.
Resistance and Support Levels for the Day (October 22)
Resistance Levels: 24,927, 24,998, 25,112
Support Levels: 24,699, 24,628, 24,514
A decisive fall below 24,700 could open the doors for further downside towards 24,500, a key support level. On the upside, the index faces immediate resistance at 25,000, followed by stronger resistance at 25,500 and 26,000.
Conclusion and Recommendations
- The Nifty 50 remains in a weak technical setup, trading below key moving averages. Until the index manages to break above these levels, weakness and range-bound trading are likely to persist.
- Investors should watch for a decisive break below 24,700, which could trigger further declines towards 24,500. On the flip side, a breakout above 25,000 could pave the way for further upside towards 25,500.
- Traders should monitor volatility levels (India VIX) and Open Interest data closely to gauge market sentiment in the coming sessions. A rise in the VIX may signal increased risk and further downside pressure.
- The current PCR suggests a bearish sentiment, but a reversal in PCR levels could indicate a shift in momentum.
Disclaimer
The above report is based on technical analysis and market data as of October 21. All investors should consider their own risk appetite and consult with financial experts before making investment decisions. Market conditions are subject to change, and the views expressed in this report are for informational purposes only. The author and the publishing entity do not take responsibility for any losses that may arise from decisions based on this report.
Nifty 50 Pre-Open OI Data Analysis October 23
Post-Market Analysis – October 22
On October 22, the Nifty 50 experienced a sharp selloff, plunging 1.25% to close at 24,472, hitting its lowest point in 10 weeks. The index broke two crucial support levels at 24,700 and 24,550 during the day, signaling significant weakness as it dropped below the mid-Bollinger band on the weekly scale. This marked a continuation of the bearish momentum for the fourth consecutive week, with the index now approaching its next immediate support at 24,400.
The bearish candlestick formation on the daily timeframe, coupled with the fact that the Nifty 50 fell below the 100-day Exponential Moving Average (EMA) for the first time since June 4, indicated a decisive shift towards negative sentiment. The lower highs-lower lows pattern seen on the weekly charts reinforced the ongoing downtrend.
Momentum indicators also echoed the weakness in the market. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) both signaled a negative bias, indicating the likelihood of further downside pressure.
Technical Setup at the End of the Day
- Support Levels: Immediate support now lies at 24,400. If the index fails to hold above this level, it may correct further to the 24,000-23,900 zone, where the next major support is expected.
- Resistance Levels: On the higher side, immediate resistance is seen at 24,700. The pivot point analysis also shows key resistance levels at 24,767, 24,870, and 25,036.
- Bollinger Band & EMA: The index has fallen below both the mid-Bollinger band (24,717) and the 20-week EMA (24,550), reinforcing the bearish outlook for the near term.
Market Sentiment at the Close
The market sentiment remained highly bearish at the close of trading on October 22. The Nifty Put-Call ratio (PCR), an indicator of overall market mood, dropped to 0.73 from the previous session’s 0.81, signaling heightened bearish sentiment. A PCR below 0.7 typically indicates that more traders are selling Calls than Puts, reflecting bearish market behavior.
Volatility, as measured by the India VIX, increased by 4.6%, closing at 14.4. This rising volatility may add further uncertainty to the market, particularly for bullish traders. If the VIX sustains above the 14 mark, it could signal further discomfort for the bulls.
Pre-Open OI Data – October 23
The Open Interest (OI) data for the Nifty 50 options on October 23 presents key insights for the day’s potential market movement:
- Maximum Call OI: The 25,000 strike holds the maximum open interest at 94.73 lakh contracts, making this level a critical resistance point in the near term. Other significant Call strikes are at 26,000 (72.83 lakh contracts) and 25,200 (65.64 lakh contracts).
- Maximum Put OI: On the Put side, the 24,000 strike has the highest open interest with 57.51 lakh contracts, indicating strong support at this level. It is followed by the 23,000 strike with 39.56 lakh contracts.
- Significant Call Writing: Maximum Call writing was observed at the 24,600 strike (33.13 lakh contracts), suggesting stiff resistance around this level. Significant additions were also noted at the 24,700 and 24,500 strikes.
- Significant Put Writing: The 24,400 strike saw the highest Put writing (12.6 lakh contracts), reinforcing this as a key support area, followed by strong additions at the 23,900 and 24,300 strikes.
Resistance and Support Levels
Resistance Levels (Pivot Points):24,767,24,870,25,036
Support Levels (Pivot Points):24,433,24,330,24,164
Conclusion and Recommendations
The Nifty 50 has entered a corrective phase, breaking key support levels and forming a bearish setup on the daily and weekly charts. The lower highs-lower lows pattern, the fall below crucial EMAs, and negative signals from RSI and MACD indicate that the market may continue its downward trend in the short term. The immediate focus will be on whether the index can hold above the 24,400 support level. If this is breached, further corrections toward 24,000-23,900 are likely.
In the short term, traders should approach the market cautiously, especially in light of rising volatility (VIX) and bearish sentiment reflected in the PCR and options data. If the market finds support at 24,400, short-covering rallies may occur, but resistance around 24,700 and higher levels will be crucial to watch.
Recommendations:
- Traders: Avoid aggressive long positions until the market stabilizes around key support levels. Short positions may be considered below 24,400, with a target towards 24,000.
- Investors: Adopt a wait-and-watch approach and avoid fresh entries until clearer market signals emerge.
Disclaimer
The views and information presented in this report are for educational purposes and should not be interpreted as investment advice. Traders and investors are advised to conduct their own research or consult with financial professionals before making any trading decisions. Trading in financial markets involves risk, and past performance does not guarantee future results.
Nifty 50 Pre-Open OI Data Analysis: October 24, 2024
Post-Market Analysis:
On October 23, 2024, the Nifty 50 index failed to sustain its intraday rally and closed moderately lower at 24,436, marking its third consecutive day of decline. The market has been in a consolidation phase as it struggles to move past key resistance levels. Notably, the index remained well below the 20-week Exponential Moving Average (EMA) of 24,550 and the 20-week Simple Moving Average (SMA) of 24,700, both of which are critical hurdles to further upward movement.
The index’s inability to break through these resistance levels signals continued weakness in the market, with immediate support seen in the 24,400-24,350 zone. If the index falls below this range, a further decline towards 24,200 or even 24,000 in the upcoming sessions cannot be ruled out, according to market experts.
Technical Setup at the End of the Day:
- Resistance Levels (Based on Pivot Points): 24,559, 24,612, and 24,699
- Support Levels (Based on Pivot Points): 24,386, 24,333, and 24,247
- Candlestick Formation: The Nifty 50 formed a small bullish candlestick pattern resembling a Bullish Inverted Hammer on the daily charts, but it’s not a classical one. This pattern suggests a potential bullish reversal; however, confirmation in subsequent sessions is crucial.
- Market Structure: The index continued its lower highs-lower lows formation, a bearish sign. Momentum indicators also displayed a negative crossover, with the Nifty trading below the 100-day EMA, indicating continued weakness.
Market Sentiment at Closing:
Volatility surged above key moving averages, reaching a two-week high, and extending its upward trajectory for the third session in a row, unsettling market participants. The India VIX, a key measure of market volatility, rose by 1.58%, reaching 14.62. For stability in the market, VIX must fall below 14.
The Nifty Put-Call Ratio (PCR) rose to 0.79 from the previous session’s 0.73. A rising PCR above 0.7 generally indicates more Puts are being sold than Calls, signaling a shift towards bullish sentiment. However, sustained bearish momentum and increasing volatility have kept bulls cautious.
Pre-Open OI Data Analysis for October 24, 2024:
- Resistance Levels (Based on OI Data): Maximum open interest was recorded at the 25,000 strike with 1.28 crore contracts, which remains a key resistance level. Other notable resistance levels include the 24,800 strike (78.36 lakh contracts), 24,700 strike (74.56 lakh contracts), and 24,600 strike (72.69 lakh contracts).
- Call Writing Activity: Significant Call writing was observed at the 25,000 strike, which saw an addition of 34.88 lakh contracts, followed by the 24,600 and 24,700 strikes with 34.17 lakh and 25.87 lakh contracts added, respectively.
- Put Writing Activity: On the downside, the 24,000 strike has the highest open interest with 71.49 lakh contracts, indicating key support at this level. Strong Put writing at the 24,200 strike (36.99 lakh contracts) further reinforces support around this level.
- Put-Call Unwinding: The 24,500 strike saw the most Put unwinding, shedding 6.05 lakh contracts, suggesting traders are moving away from this level.
Resistance and Support:
- Immediate Resistance Levels: 24,550 (20-week EMA), 24,700 (20-week SMA), and 25,000 (maximum OI).
- Immediate Support Levels: 24,400-24,350 zone (short-term), 24,200, and 24,000 (based on OI data).
Conclusion and Recommendations:
- Market Sentiment: The market’s current phase is marked by consolidation, with key technical indicators pointing towards continued volatility. Until the Nifty surpasses the 20-week EMA and SMA, bullish momentum may remain weak.
- Key Levels to Watch: Traders should closely monitor the 24,400-24,350 support zone. A breach of this level may trigger further downside to 24,200-24,000.
- For Traders: With increased volatility and uncertainty, short-term traders may look for opportunities in the 24,400-24,350 range for quick intraday trades. On the other hand, a break above the 24,550 level could indicate a potential bullish reversal.
- Long-Term Outlook: With maximum open interest at the 25,000 strike, the Nifty is likely to face significant resistance in this area over the coming weeks. Long-term traders should wait for the index to move past key resistance levels for a clearer direction.
Disclaimer:
This report is for informational purposes only and should not be considered as financial advice. Trading in financial markets involves significant risk, and you should consult with your financial advisor before making any investment decisions.
Nifty 50 Pre-Open OI Data Analysis October 25
Post Market Analysis for October 24
On October 24, the Nifty 50 index remained rangebound and closed marginally below 24,400, registering its fourth consecutive day of losses. The index ended the session with slight declines as it continued its southward journey, reflecting persistent bearish sentiment in the market.
The Nifty 50 formed two crucial candlestick patterns over the past two sessions—a Doji pattern and an Inverted Hammer—both signalling indecision in the market and the possibility of a near-term reversal. However, the overall market trend continues to Favor the bears, given the index’s ongoing formation of lower highs and lows. As a result, experts have advised traders to adopt a “sell on rally” strategy.
Technical Setup at the End of the Day
- Candlestick Pattern: The Doji formation seen on October 24 follows an Inverted Hammer pattern from the previous session. Both patterns suggest potential reversals in the short term, especially as the market has already been in a downtrend.
- Key Moving Averages: The Nifty 50 is trading below both the 100-day Exponential Moving Average (EMA) and the 20-week EMA, reinforcing the ongoing bearish trend.
Momentum Indicators:
- The Relative Strength Index (RSI) is showing weakness with a negative crossover, signalling oversold conditions.
- The Moving Average Convergence Divergence (MACD) continues to exhibit a bearish signal, further highlighting the market’s vulnerability in the short term.
Market Sentiment at the Time of Closing
Despite the signs of a potential bounce due to the candlestick formations, overall market sentiment remains cautious with a bias toward the bearish side. The lower highs and lows formation, alongside the bearish momentum indicators, indicate that any potential upward movement could be short-lived. Resistance at higher levels, combined with the broader negative trend, suggests a lack of strong buying interest.
- India VIX (Volatility Index): Volatility, a key measure of market risk, declined by 4.46%, closing at 13.97. This marked the end of a three-day upward move in volatility. Though lower volatility generally benefits bulls, the Nifty’s position below crucial moving averages indicates a bearish sentiment persists.
Pre-Open OI Data Analysis for October 25
The Open Interest (OI) data provides insights into key levels that could influence the market’s movement in the upcoming sessions:
- Maximum Call Open Interest: The 24,400 strike holds the highest Call OI, with 2.46 crore contracts. This suggests strong resistance at this level. The 24,500 strike follows, with 1.12 crore contracts, further confirming resistance around 24,500.
- Maximum Put Open Interest: On the downside, 24,400 also holds the maximum Put OI with 3.15 crore contracts, making this a critical support level. The 24,300 and 24,000 strikes also show significant Put OI, providing additional support levels.
- Put-Call Ratio (PCR): The PCR surged to 1.00, up from 0.79 the previous day, indicating traders are increasingly writing Puts, which suggests cautious optimism in the market. A PCR above 1 typically signals a possible bounce, but given the overall technical weakness, this could be short-lived.
Resistance and Support Levels (Based on Pivot Points)
- Resistance: 24,460, 24,493, and 24,547
- Support: 24,354, 24,321, and 24,268
Conclusion and Recommendation
The formation of the Doji and Inverted Hammer patterns suggests the potential for a short-term bounce, but the broader market structure remains bearish. Given the resistance at 24,500-24,600 and strong support at 24,300, traders should continue to adopt a cautious approach.
- For short-term traders, following a “sell on rally” strategy is advisable as long as the Nifty remains below the 100-day EMA.
- The 24,300 level is critical support. A break below this could accelerate selling pressure, with the Nifty potentially heading towards 24,000.
- Traders should also keep an eye on volatility levels, as any spike in the India VIX could signal increased market turbulence.
Disclaimer
This report is for informational purposes only and does not constitute financial advice. Market conditions can change rapidly, and traders should perform their own research or consult with a financial advisor before making trading decisions. Past performance does not guarantee future results.