The Nifty 50 gained some strength amid rangebound trading, rising by a third of a percent on December 27. However, it remained within the broader trading range of the 200-day SMA (23,862) and the 200-day EMA (23,694) on a closing basis for the fourth consecutive session. Experts anticipate that rangebound trading may continue in the upcoming sessions amid low trading volumes. Nevertheless, the declining VIX could provide support for the bulls. If the index decisively surpasses and sustains above the 200-day SMA, a rally towards 24,000–24,200 is possible. Conversely, if it falls below the 200-day EMA, the decline may extend to 23,500 (the low of December 20).
Here are 15 data points we have collated to help you spot profitable trades:
1) Key Levels For The Nifty 50 (23,813)
Resistance based on pivot points: 23,904, 23,936, and 23,989
Support based on pivot points: 23,798, 23,766, and 23,713
Special Formation: The Nifty 50 formed a small bullish candle with a long upper shadow on the daily charts, indicating a lack of strength at higher levels. Overall, the sentiment is expected to remain bearish as the index is still significantly below the 10, 20, 50, and 100-day EMAs and remains within the lower band of the Bollinger Bands. The momentum indicators—RSI (Relative Strength Index at 40.7), MACD (Moving Average Convergence Divergence, below the zero line), and KST (Know Sure Thing, showing a negative crossover)—all point to continued weakness.
2) Key Levels For The Bank Nifty (51,311)
Resistance based on pivot points: 51,542, 51,633, and 51,782
Support based on pivot points: 51,245, 51,153, and 51,005
Resistance based on Fibonacci retracement: 51,578, 52,128
Support based on Fibonacci retracement: 50,666, 49,787
Special Formation: The Bank Nifty exhibited similar behaviour to the Nifty 50, forming a small green candle with a long upper wick, indicating selling pressure at higher levels. The index failed to close above the 100-day EMA for another session, reinforcing the notion of a strong hurdle on the upside. Additionally, it remained below the 10, 20, 50, and 100-day EMAs as well as the lower band of the Bollinger Bands. Momentum indicators such as RSI (at 42), MACD (below the zero line), and KST (negative crossover) signal continued weakness in the index.
According to the weekly options data, the maximum Call open interest was seen at the 24,500 strike (with 67.85 lakh contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 24,000 strike (55.26 lakh contracts), and the 24,200 strike (52.41 lakh contracts).
Maximum Call writing was observed at the 24,200 strike, which saw an addition of 31.79 lakh contracts, followed by the 24,100 and 24,500 strikes, which added 26.28 lakh and 24.11 lakh contracts, respectively, while the maximum Call unwinding was seen at the 23,800 strike, which shed 2.86 lakh contracts, followed by the 23,750 and 23,500 strikes, which shed 1.35 lakh and 74,550 contracts, respectively.
On the Put side, the 23,500 strike holds the maximum open interest (with 65.72 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 23,800 strike (57.65 lakh contracts), and the 23,000 strike (41.09 lakh contracts).
The maximum Put writing was placed at the 23,500 strike, which saw an addition of 38.52 lakh contracts, followed by the 23,000, and 23,900 strikes, with 13.66 lakh, and 12.68 lakh contracts added, respectively, while the maximum Put unwinding was seen at the 24,600 strike, which shed 3,150 contracts, followed by the 24,900 and 24,650 strikes, which shed 2,700 and 2,325 contracts, respectively.
5) Bank Nifty Call Options Data
According to the monthly options data, the maximum Call open interest was seen at the 52,000 strike, with 11.32 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 53,000 strike (10.58 lakh contracts) and the 51,500 strike (7.81 lakh contracts).
Maximum Call writing was visible at the 53,500 strike (with the addition of 1.04 lakh contracts), followed by the 52,000 strike (73,095 contracts) and the 53,300 strike (27,660 contracts), while the maximum Call unwinding was seen at the 52,500 strike, which shed 1.01 lakh contracts, followed by the 51,200 and 51,100 strikes, which shed 87,945 and 39,840 contracts, respectively.
6) Bank Nifty Put Options Data
On the Put side, the 51,500 strike holds the maximum open interest (with 8.86 lakh contracts), which can act as a key level for the index. This was followed by the 50,000 strike (7.91 lakh contracts) and the 51,000 strike (7.34 lakh contracts).
The maximum Put writing was observed at the 50,000 strike (which added 80,970 contracts), followed by the 51,500 strike (73,680 contracts) and the 52,000 strike (65,730 contracts), while the maximum Put unwinding was seen at the 51,200 strike, which shed 45,705 contracts, followed by the 51,100 and 51,000 strikes, which shed 36,570 and 17,130 contracts, respectively.
7) Funds Flow (Rs crore)
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell to 1.03 on December 27, from 1.05 level 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, the volatility index, fell sharply by 5.68 percent on Friday to 13.24 after rising 6.51 percent in the previous session, providing comfort to the bulls. Experts note that as long as the VIX remains below the 14 level, the bulls may retain their advantage.
A long build-up was seen in 58 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.
11) Long Unwinding (24 Stocks)
24 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.
12) Short Build-up (108 Stocks)
108 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.
13) Short-Covering (36 Stocks)
36 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: Nil
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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