Considering the solid recovery from the day's low in the last hour of trade and the decisive surpassing of 22,300 levels on May 16, the market seems to have turned strong after a day of consolidation. The Nifty 50 is likely to head towards 22,500-22,600 levels, provided 22,300 acts as a support in the coming sessions, experts said.
The Nifty 50 maintained a higher highs formation with above-average volumes on the weekly F&O expiry session and is now trading above all key moving averages. Additionally, the momentum indicator RSI (relative strength index placed at 53) gave a positive crossover, which are all positive signs.
Also read: Technical View: Nifty climbs above all key moving averages, likely inching towards 22,600
Here are 15 data points we have collated to help you spot profitable trades:
1) Key levels for the Nifty 50
Resistance based on pivot points: 22,441, 22,530, and 22,674
Support based on pivot points: 22,153, 22,064, and 21,919
Special formation: The index continued higher highs, higher lows formation for the third straight session with a positive crossover in RSI.
Also read: Trading Plan: Will Nifty, Bank Nifty sustain upward momentum?
2) Key levels for the Bank Nifty
Resistance based on pivot points: 48,062, 48,230, and 48,503
Support based on pivot points: 47,518, 47,350, and 47,078
Resistance based on Fibonacci retracement: 48,128–48,480
Support based on Fibonacci retracement: 47,645–47,517
Special formation: With Thursday's strong intraday recovery, the Bank Nifty went closer to the 48,000 mark, the key hurdle for the index, and maintained higher highs, higher lows formation for three days in a row with momentum indicator RSI (49.69) showing a positive crossover.
According to the weekly options data, the maximum Call open interest was seen at the 22,400 strike. This level can act as a key level for the Nifty in the short term. It was followed by the 22,500 strike, and 22,600 strike.
Maximum Call writing was observed at the 22,400 strike, followed by 22,000 and 22,600 strikes, while the maximum Call unwinding was visible in the 22,200 strike, followed by 22,500 and 23,200 strikes.
On the Put side, the 22,400 strike owned the maximum open interest, which can act as a key level for the Nifty. It was followed by the 22,000 strike, and then the 22,100 strike.
The maximum Put writing was visible at the 22,400 strike, followed by 22,100 and 22,300 strikes, while the Put unwinding was observed at the 21,400 strike, followed by 21,300 and 21,200 strikes.
5) Bank Nifty Call options data
The maximum Call open interest was seen at the 48,000 strike. This level can act as a key resistance for the Nifty in the short term. It was followed by the 48,500 strike, and 49,000 strike.
Maximum Call writing was visible at the 48,500 strike, followed by 48,000 and 48,300 strikes, while there was no Call unwinding within 46,800-49,200 strikes.
6) Bank Nifty Put options data
On the Put side, the 47,500 strike owned the maximum open interest, which can act as a key support level for the Nifty. It was followed by the 48,000 strike, and then the 47,000 strike.
The maximum Put writing was seen at the 47,500 strike, followed by 48,000 and 47,200 strikes, while there was hardly any Put unwinding within 46,900-49,000 strikes.
7) Funds Flow (Rs crore)
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, jumped to 1.19 on May 16, from 0.92 levels in the previous session.
The increasing PCR or 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 volatility cooled down a bit but maintained at elevated levels of 20, which experts say has to fall considerably further to around 15-16 levels to get the bulls in a comfortable position. The India VIX, the fear index, declined by 1.36 percent to 20, from 20.27 level.
A long build-up was seen in 56 stocks, including Balkrishna Industries, Hindustan Aeronautics, Mahindra and Mahindra, Oberoi Realty, and Ipca Laboratories. An increase in open interest (OI) and price indicates a build-up of long positions.
11) Long unwinding (20 stocks)
20 stocks saw a decline in OI along with a fall in price, indicating long unwinding.
12) Short build-up (18 stocks)
18 stocks saw an increase in OI, along with a fall in price, indicating a build-up of short positions.
13) Short-covering (93 stocks)
93 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.
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: Bandhan Bank, Biocon, Granules India, India Cements.
Stocks retained in F&O ban: Balrampur Chini Mills, Birlasoft, GMR Airports Infrastructure, Hindustan Copper, Vodafone Idea, Piramal Enterprises, SAIL, and Zee Entertainment Enterprises.
Stocks removed from F&O ban: LIC Housing Finance.
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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