Nifty Trade Setup
The market extended its downward journey amid rangebound trade for yet another session on October 16, with the Nifty 50 falling below the 25,000 mark, losing 86 points. The index has been trading within a range of 24,900 to 25,200 for the last six days, and it needs to decisively breach either side of this range for a clearer direction. A move above 25,200 could lead to a test of 25,400, while a fall below 24,900 may see the index drop to the 24,800-24,700 zone, according to experts.
Here are 15 data points we have collated to help you spot profitable trades:
1) Key Levels For The Nifty 50 (24,971.30)
Resistance based on pivot points: 25,062, 25,105, and 25,176
Support based on pivot points: 24,920, 24,877, and 24,806
Special Formation: The Nifty 50 formed a small bearish candle with upper and lower shadows on the daily timeframe, signaling a rangebound session. The index could not sustain above the 50-day EMA (Exponential Moving Average) but defended the 24,900 level on both an intraday and closing basis. Additionally, the volume has remained below average over the last six trading sessions, and every week, the index remains within the previous week's range.
2) Key Levels For The Bank Nifty
Resistance based on pivot points: 51,970, 52,046, and 52,168
Support based on pivot points: 51,726, 51,650, and 51,528
Resistance based on Fibonacci retracement: 52,329, 52,838
Support based on Fibonacci retracement: 51,256, 50,273
Special Formation: The Bank Nifty saw a small bullish candle with an upper shadow on the daily charts, indicating selling pressure at higher levels, but it continued the higher highs-higher lows formation for the third consecutive session, falling 105 points to 51,801. The index managed to defend the 10-day and 50-day EMAs, but it could not hold the 20-day EMA, which is key for further upside. Every week, it has seen a higher high-higher low formation after two consecutive weeks of lower highs and lower lows.
3) Nifty Call Options Data
According to the weekly options data, the 25,500 strike holds the maximum open interest (with 1.15 crore contracts) ahead of weekly expiry on Thursday. This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,200 strike (1.01 crore contracts) and the 25,100 strike (88.84 lakh contracts).
Maximum Call writing was observed at the 25,500 strike, which saw an addition of 45.89 lakh contracts, followed by the 25,000 and 25,400 strikes, which added 33.18 lakh and 24.82 lakh contracts, respectively. The Call unwinding was seen at the 24,500 strikes, which shed 8,200 contracts, followed by the 24,600 and 24,100 strikes, which shed 4,325 and 4,300 contracts, respectively.
4) Nifty Put Options Data
On the Put side, the maximum open interest was seen at the 24,500 strikes (with 62.88 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 25,000 strike (54.29 lakh contracts), and the 24,000 and 24,800 strikes (53.89 lakh contracts each).
The maximum Put writing was placed at the 24,800 strike, which saw an addition of 26.6 lakh contracts, followed by the 24,300, and 24,500 strikes, with 22.74 lakh, and 15.3 lakh contracts added, respectively, while the Put unwinding was seen at the 25,100 strike, which shed 9.32 lakh contracts, followed by the 25,200, and 25,000 strikes, which shed 7.85 lakh and 4.83 lakh contracts, respectively.
5) Bank Nifty Call Options Data
According to the weekly options data, the 51,800 strike holds the maximum open interest, with 86.78 lakh contracts. This can act as a key level for the index in the short term. It was followed by the 51,900 strike (76.22 lakh contracts) and the 52,000 strike (56.13 lakh contracts).
Maximum Call writing was visible at the 51,800 strikes (with the addition of 71.77 lakh contracts), followed by the 51,900 strikes (55.62 lakh contracts) and the 52,000 strikes (19.65 lakh contracts), while the maximum Call unwinding was seen at the 52,500 strike, which shed 3.91 lakh contracts, followed by 52,800 and 51,000 strikes, which shed 3.73 lakh and 1.91 lakh contracts, respectively.
6) Bank Nifty Put Options Data
On the Put side, the maximum open interest was seen at the 51,800 strikes (with 1.44 crore contracts), which can act as a key level for the index. This was followed by the 51,700 strike (45.78 lakh contracts) and the 51,900 strike (37.16 lakh contracts).
The maximum Put writing was observed at the 51,800 strikes (which added 1.3 crore contracts), followed by the 51,700 strikes (30.55 lakh contracts) and the 51,900 strikes (22.37 lakh contracts), while the maximum Put unwinding was seen at the 51,000 strike, which shed 6.3 lakh contracts, followed by 52,000 and 51,200 strikes which shed 3.1 lakh and 1.45 lakh contracts, respectively.
7) Funds Flow (Rs crore)
8) Put-Call Ratio
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell to 0.74 on October 16, from 0.77 levels in the previous session.
The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.
9) India VIX
Volatility remained at lower levels and below all key moving averages, despite a moderate increase for another session, favoring bulls. The India VIX, the fear index, was up by 0.38 percent to 13.05, up from 13 levels.
10) Long Build-up (34 Stocks)
A long build-up was seen in 34 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.
11) Long Unwinding (47 Stocks)
47 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.
12) Short Build-up (65 Stocks)
65 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.
13) Short-Covering (38 Stocks)
38 stocks saw short-covering, meaning a decrease in OI, along with a price increase.
14) High Delivery Trades
Here are the stocks that saw a high share of delivery trades. A high share of delivery reflects investing (as opposed to trading) interest in a stock.
15) Stocks Under F&O Ban
Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
Stocks added to F&O ban: Nil
Stocks retained in F&O ban: Bandhan Bank, Chambal Fertilisers and Chemicals, GNFC, Granules India, Hindustan Copper, IDFC First Bank, Indian Energy Exchange, L&T Finance, Manappuram Finance, National Aluminium Company, Punjab National Bank, RBL Bank, SAIL, Tata Chemicals
Stocks removed from F&O ban: Nil
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