Trade setup for October 31: Top 15 things to know before the opening bells

Nifty Trade setup for October 31

The Nifty 50 could not see follow-through buying on October 30, losing 0.7 percent to close below the 26,000 mark after the outcome of the Federal Reserve meeting. Given the cautious sentiment, the index may consolidate for a few sessions before the beginning of the next leg of the upmove. If the index stays below 26,000, the consolidation may continue with support at 25,800–25,700, followed by 25,500 as a crucial support level. However, climbing decisively above 26,000 can open the door for the 26,100–26,300 zone, according to experts.

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

1) Key Levels For The Nifty 50 (25,878)

Resistance based on pivot points: 25,990, 26,034, and 26,105

Support based on pivot points: 25,847, 25,803, and 25,731

Special Formation: The Nifty 50 formed a bearish candle on the daily timeframe and fell below the 5-day EMA, signalling caution. The index still sustained well above the short- and medium-term moving averages; however, the RSI dropped to 64.14 with a bearish crossover. The Stochastic RSI also showed a negative crossover. The MACD maintained a bullish crossover, while the histogram stayed above the zero line but has been falling gradually, signalling fading momentum. All these indicators point to near-term caution despite an overall positive structure.

2) Key Levels For The Bank Nifty (58,031)

Resistance based on pivot points: 58,247, 58,326, and 58,452

Support based on pivot points: 57,994, 57,915, and 57,788

Resistance based on Fibonacci retracement: 58,739, 60,148

Support based on Fibonacci retracement: 57,394, 56,662

Special Formation: The Bank Nifty also showed action similar to the Nifty, forming a bearish candle with an upper shadow on the daily charts. This action suggests weakness with selling pressure at higher levels. The banking index still sustained above key moving averages, which continue to trend upward. The RSI, at 66.98, and the Stochastic RSI showed a negative crossover, while the histogram remained above the zero line but continued to fall consistently, signalling fading momentum, even though the MACD maintained a bullish crossover. All these factors indicate short-term weakness with potential consolidation at higher levels.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was seen at the 26,000 strike (with 1.63 crore contracts). This level can act as a key resistance for the Nifty in the short term. It was followed by the 26,200 strike (1.05 crore contracts), and the 26,500 strike (1.03 crore contracts).

Maximum Call writing was observed at the 26,000 strike, which saw an addition of 94.65 lakh contracts, followed by the 25,900 and 26,100 strikes, which added 59.16 lakh and 51.19 lakh contracts, respectively. The maximum Call unwinding was seen at the 25,600 strike, which shed 20,325 contracts, followed by the 25,400 and 25,300 strikes, which shed 17,775 and 3,600 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 25,500 strike holds the maximum Put open interest (with 77.82 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 26,000 strike (67.6 lakh contracts) and the 25,900 strike (63.86 lakh contracts).

The maximum Put writing was placed at the 25,600 strike, which saw an addition of 14.77 lakh contracts, followed by the 25,500 and 25,900 strikes, which added 14.47 lakh and 9.09 lakh contracts, respectively. The maximum Put unwinding was seen at the 26,000 strike, which shed 37.44 lakh contracts, followed by the 26,100 and 26,050 strikes, which shed 19.45 lakh and 17.83 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the 57,000 strike holds the maximum Call open interest, with 10.89 lakh contracts. This can act as a key level for the index in the short term. It was followed by the 58,000 strike (9.63 lakh contracts) and the 60,000 strike (9.09 lakh contracts).

Maximum Call writing was observed at the 60,000 strike (with the addition of 1.33 lakh contracts), followed by the 58,500 strike (1.11 lakh contracts) and 58,200 strike (1.03 lakh contracts). The maximum Call unwinding was seen at the 57,600 strike, which shed 56,910 contracts, followed by the 58,700 and 57,500 strikes, which shed 26,180 and 18,060 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 58,000 strike (with 17.48 lakh contracts), which can act as a key support level for the index. This was followed by the 57,000 strike (11.61 lakh contracts) and the 58,500 strike (5.2 lakh contracts).

The maximum Put writing was placed at the 57,800 strike (which added 56,455 contracts), followed by the 58,900 strike (31,990 contracts) and the 59,100 strike (17,360 contracts). The maximum Put unwinding was seen at the 58,500 strike which shed 75,005 contracts, followed by the 58,300 and 57,000 strikes, which shed 53,515 and 36,330 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell to 0.75 on October 30, compared to 1.14 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 fear index, India VIX, closed above the 12 level after two months and has been gradually inching higher, signalling some caution. However, a decisive move above the 13 zone could bring discomfort for the bulls. The index rose 0.79 percent to 12.07, maintaining its upward trajectory since the start of the current week.

10) Long Build-up (25 Stocks)

A long build-up was seen in 25 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (51 Stocks)

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

12) Short Build-up (111 Stocks)

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

13) Short-Covering (26 Stocks)

26 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: Sammaan Capital

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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