F&O Manual | Nifty soars to a new all-time high; breather expected before uptrend towards 23,500

At 09:46 hrs IST, the Sensex was up 98.01 points or 0.13 percent at 75,516.05, and the Nifty was up 14.00 points or 0.06 percent at 22,981.70.

Bulls drive markets to new all-time highs, with the Nifty 50 crossing the 23,000 level for the first time in morning trade today (May 24). The near-term support for the Nifty has shifted from the 22,520-22,500 zone to 22,700. According to analysts, the next target for the index is 23,500-24,000.

At 09:46 hrs IST, the Sensex was up 98.01 points or 0.13 percent at 75,516.05, and the Nifty was up 14.00 points or 0.06 percent at 22,981.70.About 1668 shares advanced, 1250 shares declined, and 121 shares unchanged.

Bars in red indicate the change in open interest (OI) of call writers, while the green bars show the change in OI of put writers

Options data suggests key straddle positions formed at the 23,000 strike. "For the May monthly series, OI PCR is at 1.35, which implies a buy-on-dips strategy in the Nifty," said Sudeep Shah, DVP and Head of Technical and Derivative Research at SBI Securities.

SBI Securities: The 23,000 strike has significant call open interest, followed by the 23,100 strike. On the put side, 22,900 has significant open interest, followed by the 22,800 strike. "These technical and derivative factors indicate that the index is likely to continue its northward journey and test the level of 23,100, followed by 23,250 in the next couple of trading sessions. On the downside, the zone of 22,800-22,770 is likely to provide a cushion in case of any immediate decline," said Shah.

JM Financial: Previous ATH of 22,783 now becomes an immediate trading support while put options OI data hint at a support base being formed at 22,700. "Immediate resistance at 23,000 where the Nifty is likely to take a breather for a couple of days before resuming the uptrend for 23,500," said Avani Bhatt, Senior Vice President - Derivative Research at JM Financial.

"On a positional basis, maintain a bullish stance. Buy on declines if any close to 22,700 in the range of 30 points for a target of 23,500/24,000, keeping a stop loss of 22,400," she added.

Bank Nifty

May futures witnessed short covering of 3.5 percent, with OIPCR at 1.20 indicating a positive outlook. For 29 May expiry, the highest OI at 50,000 CE followed by 49,000 CE and 48,000 PE.

JM Financial: "Bank Nifty levels of 49,000/49,500 are on the cards soon! The previous congestion zone of 48,200-48,300 will now act as immediate support. Retracements or declines close to 48,200-48,300 should be used as a buying opportunity for a target of 49,000/49,500, with a stop loss at 47,900," said Bhatt.

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