Trade setup for January 29: Top 15 things to know before the opening bell

Nifty Trade setup for January 29

• Possible upmove toward 25,450–25,500 likely provided Nifty 50 defends 200 DEMA
• Consolidation with range-bound trading may continue till index trades below 25,500
• Fall below 200 DEMA support can open door for 24,900 in Nifty 50

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The benchmark Nifty 50 maintained its upward journey for another session, registering a 0.66 percent rally, negating the lower high–lower low formation and making a strong start to the February series on January 28. Momentum indicators are signalling improving strength, but the index is still trading below all key moving averages (except the 200 DEMA). A possible upmove toward 25,450–25,500 is likely in the upcoming sessions, provided the index consistently defends the 200 DEMA (25,160 – support). Until then, consolidation with range-bound trading may continue; however, a fall below support can open the door for 24,900 again, experts said.

Here are 15 data points we have collated to help you spot profitable trades:

1) Key Levels For The Nifty 50 (25,343)

Resistance based on pivot points: 25,371, 25,415, and 25,485

Support based on pivot points: 25,230, 25,187, and 25,116

Special Formation: The Nifty 50 formed a bullish candle with minor upper and lower shadows on the daily timeframe amid high volumes, indicating a positive tone. The index sustained above the 200 DEMA and the support trendline for another session but remained below the 20-, 50- and 100-day EMAs, as well as the midline of the Bollinger Bands. The RSI jumped to 40.45 with a bullish crossover, and the Stochastic RSI maintained a positive crossover. The MACD remained below the signal and zero lines, though it inclined upward slightly, while histogram weakness faded somewhat but stayed well below the zero line. All this indicates improving momentum, though confirmation is still awaited.

2) Key Levels For The Bank Nifty (59,599)

Resistance based on pivot points: 59,689, 59,797, and 59,973

Support based on pivot points: 59,337, 59,229, and 59,053

Resistance based on Fibonacci retracement: 59,938, 60,429

Support based on Fibonacci retracement: 58,811, 57,809

Special Formation: The Bank Nifty formed a small-bodied bullish candle with a minor upper shadow and a long lower shadow on the daily charts, indicating strong buying interest despite minor pressure at higher levels. With Wednesday’s rally, the index climbed back above all key moving averages and the midline of the Bollinger Bands, with short-term moving averages slightly trending upward. The index also surpassed all its support trendlines. The RSI rose to 52.78 with a positive crossover, and the Stochastic RSI sustained its uptrend. The MACD inclined upward but remained below the reference and zero lines, with further fading of weakness in the histogram. All this indicates strengthening momentum with improving breadth.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was placed at the 26,000 strike (with 77.53 lakh contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,500 strike (52.2 lakh contracts) and 25,300 strike (41.57 lakh contracts).

Maximum Call writing was observed at the 26,000 strike, which saw an addition of 25.78 lakh contracts, followed by the 25,300 and 25,400 strikes, which added 20.48 lakh and 19.61 lakh contracts, respectively. The maximum Call unwinding was seen at the 25,100 strike, which shed 4.79 lakh contracts, followed by the 25,200 and 25,000 strikes, which shed 4.16 lakh and 2.7 lakh contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 25,000 strike holds the maximum Put open interest (with 54.39 lakh contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 25,300 strike (39.17 lakh contracts) and the 25,200 strike (30.31 lakh contracts).

The maximum Put writing was placed at the 25,300 strike, which saw an addition of 26.71 lakh contracts, followed by the 25,350 and 25,000 strikes, which added 13.31 lakh and 12.36 lakh contracts, respectively. There was hardly any Put unwinding seen in the 24,800-26,200 strike band.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 60,000 strike, with 16.52 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 61,000 strike (4.27 lakh contracts) and the 59,500 strike (3.24 lakh contracts).

Maximum Call writing was observed at the 59,500 strike (with the addition of 1.1 lakh contracts), followed by the 59,600 strike (92,790 contracts) and 59,800 strike (75,900 contracts). The maximum Call unwinding was seen at the 59,100 strike, which shed 28,020 contracts, followed by the 59,000 and 59,300 strikes which shed 13,290 and 12,630 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 60,000 strike holds the maximum Put open interest (with 14.39 lakh contracts), which can act as a key level for the index. This was followed by the 58,000 strike (7.39 lakh contracts) and the 59,000 strike (5.98 lakh contracts).

The maximum Put writing was placed at the 59,000 strike (which added 1.56 lakh contracts), followed by the 59,500 strike (1.52 lakh contracts) and the 58,000 strike (1.09 lakh contracts). There was hardly any Put unwinding seen in the 58,000-61,750 strike band.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, declined to 0.97 on January 28, compared to 1.02 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

India VIX, which measures expected market volatility, cooled off to 13.53, down 6.42 percent, but remained at elevated levels, signalling caution for bulls. It needs to fall decisively below 11 for bulls to return to a comfort zone.

10) Long Build-up (101 Stocks)

A long build-up was seen in 101 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (15 Stocks)

15 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.

12) Short Build-up (30 Stocks)

30 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.

13) Short-Covering (66 Stocks)

66 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: Nil

Stocks removed from F&O ban: Nil