The Nifty 50 extended its downtrend for another session, erasing all of Monday’s gains and falling by 75 points on August 6. Bears are expected to gain more strength in the upcoming session, as the index traded below all key moving averages with weakness in momentum indicators. The imposition of an additional 25% tariff on India, following the recent 25% import duty by Trump, resulting in a total of 50% tariff, is likely to keep the bears active. Hence, the immediate key support is placed at 24,473 (June low), as breaking decisively below it could drive the index down toward the 200-day EMA (24,200), a generally crucial support level. On the upside, 24,700 may act as a resistance, according to experts.
Here are 15 data points we have collated to help you spot profitable trades:
1) Key Levels For The Nifty 50 (24,574)
Resistance based on pivot points: 24,645, 24,677, and 24,727
Support based on pivot points: 24,544, 24,513, and 24,463
Special Formation: The Nifty 50 formed a bearish candle on the daily timeframe, continuing the lower highs-lower lows structure, signaling weakness in the market. The 10-day EMA has already crossed below the 50-day EMA, and now the 20-day EMA is on the verge of falling below the 50-day EMA as well. Additionally, the RSI at 38.16 is maintaining a bearish crossover, and the MACD remains below the zero line. All these factors indicate a better position for bears.
2) Key Levels For The Bank Nifty (55,411)
Resistance based on pivot points: 55,526, 55,604, and 55,731
Support based on pivot points: 55,273, 55,194, and 55,068
Resistance based on Fibonacci retracement: 55,777, 56,134
Support based on Fibonacci retracement: 55,078, 54,382
Special Formation: The Bank Nifty formed a small bullish candle with upper and lower shadows on the daily charts, indicating indecision among bulls and bears. Bears remained in control, as the banking index traded below short- and medium-term moving averages, with the 10-day EMA crossing below the 50-day EMA, and the 20-day EMA trending downward. Furthermore, the MACD stayed below the zero line, and the RSI sustained below the 40 mark at 36.68, signaling weakness.
According to the weekly options data, the 25,000 strike holds the maximum Call open interest (with 1.83 crore contracts). This level can act as a key resistance for the Nifty in the short term. It was followed by the 24,700 strike (1.41 crore contracts), and the 24,800 strike (1.17 crore contracts).
Maximum Call writing was observed at the 25,000 strike, which saw an addition of 50.38 lakh contracts, followed by the 24,600 and 24,700 strikes, which added 48.33 lakh and 39.61 lakh contracts, respectively. The maximum Call unwinding was seen at the 25,250 strike, which shed 8.39 lakh contracts, followed by the 25,400 and 25,450 strikes, which shed 5.49 lakh and 1.11 lakh contracts, respectively.
On the Put side, the maximum Put open interest was observed at the 24,000 strike (with 1.05 crore contracts), which can act as a key support level for the Nifty. It was followed by the 24,600 strike (83.42 lakh contracts) and the 24,500 strike (81.03 lakh contracts).
The maximum Put writing was placed at the 24,550 strike, which saw an addition of 19.24 lakh contracts, followed by the 24,000 and 23,900 strikes, which added 13.29 lakh and 13.03 lakh contracts, respectively. The maximum Put unwinding was seen at the 24,650 strike, which shed 17.8 lakh contracts, followed by the 24,700 and 24,600 strikes, which shed 11.8 lakh and 5.49 lakh contracts, respectively.
5) Bank Nifty Call Options Data
According to the monthly options data, the maximum Call open interest was seen at the 57,000 strike, with 22.3 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 56,000 strike (12.13 lakh contracts) and the 55,500 strike (7.59 lakh contracts).
Maximum Call writing was observed at the 57,000 strike (with the addition of 71,260 contracts), followed by the 55,400 strike (41,510 contracts), and the 56,100 strike (18,375 contracts). The maximum Call unwinding was seen at the 57,500 strike, which shed 53,970 contracts, followed by the 56,000 and 55,800 strikes, which shed 27,860 and 18,830 contracts, respectively.
6) Bank Nifty Put Options Data
On the Put side, the 57,000 strike holds the maximum Put open interest (with 13.84 lakh contracts), which can act as a key level for the index. This was followed by the 56,000 strike (9.61 lakh contracts) and the 55,000 strike (9.25 lakh contracts).
The maximum Put writing was observed at the 54,000 strike (which added 1.03 lakh contracts), followed by the 55,500 strike (76,195 contracts) and the 55,300 strike (66,465 contracts). The maximum Put unwinding was seen at the 54,800 strike, which shed 16,065 contracts, followed by the 56,000 and 55,900 strikes, which shed 15,540 and 13,440 contracts, respectively.
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell to 0.74 on August 6, compared to 0.83 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
The India VIX, which measures expected market volatility, gained 2.11 percent to close at 11.96, climbing above its short-term moving averages. This suggests that bulls may need to exercise caution. Overall, the VIX increased by 11.6 percent in the past two weeks.
A long build-up was seen in 23 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.
11) Long Unwinding (60 Stocks)
60 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.
12) Short Build-up (107 Stocks)
107 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.
13) Short-Covering (30 Stocks)
30 stocks saw short-covering, meaning a decrease in OI, along with a price increase.
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.
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: PNB Housing Finance
Stocks removed from F&O ban: Nil
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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