Trade setup for September 25: Top 15 things to know before the opening bells

Nifty Trade setup for September 25

Bears maintained their hold over the market for four consecutive days, dragging the Nifty 50 near the 25,000 zone. The index shed 113 points on September 24 and lost more than 400 points from its recent peak. Sentiment has definitely turned negative for the short term, with further weakness in momentum indicators. The next crucial support is placed at the 24,900 level (which coincides with the 50-day EMA, 10-week EMA, and the 50% Fibonacci retracement of the recent rally). A decisive fall below this could strengthen the bears, however, 25,150 is expected to be 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 (25,057)

Resistance based on pivot points: 25,125, 25,154, and 25,200

Support based on pivot points: 25,031, 25,002, and 24,956

Special Formation: The Nifty 50 formed a bearish candle with both upper and lower shadows on the daily charts, indicating weakness and volatility. The index continued its lower high-lower low formation for four consecutive sessions, falling below the 10-day EMA and testing the 20-day EMA intraday. The RSI dropped to 52.17 with a negative crossover, while the MACD histogram suggests that momentum is gradually fading, and the MACD is inching downward toward a negative crossover. All these signals indicate weakness.

2) Key Levels For The Bank Nifty (55,122)

Resistance based on pivot points: 55,404, 55,515, and 55,695

Support based on pivot points: 55,045, 54,933, and 54,754

Resistance based on Fibonacci retracement: 55,614, 56,095

Support based on Fibonacci retracement: 54,980, 54,712

Special Formation: The Bank Nifty erased its previous day's gains and closed 388 points down with well-above-average volumes, forming a bearish candle with both upper and lower shadows on the daily timeframe, indicating weakness with some volatility. The index fell below both the 10-day and 50-day EMAs and came closer to the 20-day EMA (55,030). A close below this level could open the door for selling pressure. The RSI, at 51, is on the verge of a negative crossover, but the MACD has sustained its bullish crossover with the histogram still above the zero line. All these signals indicate negative sentiment in the short term.

3) Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 25,500 strike (with 1.11 crore contracts). This level can act as a key resistance for the Nifty in the short term. It was followed by the 25,300 strike (91.08 lakh contracts), and the 25,200 strike (88.79 lakh contracts).

Maximum Call writing was observed at the 25,100 strike, which saw an addition of 52.13 lakh contracts, followed by the 25,300 and 25,200 strikes, which added 36.95 lakh and 35.19 lakh contracts, respectively. The maximum Call unwinding was seen at the 24,450 strike, which shed 2.95 lakh contracts, followed by the 24,700 and 24,600 strikes, which shed 18,675 and 15,300 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 25,000 strike holds the maximum Put open interest (with 1.06 crore contracts), which can act as a key support level for the Nifty. It was followed by the 24,500 strike (74.07 lakh contracts) and the 24,900 strike (59 lakh contracts).

The maximum Put writing was placed at the 25,000 strike, which saw an addition of 24.52 lakh contracts, followed by the 25,050 and 24,900 strikes, which added 21.79 lakh and 21.06 lakh contracts, respectively. The maximum Put unwinding was seen at the 25,300 strike, which shed 9.06 lakh contracts, followed by the 25,200 and 25,400 strikes, which shed 5.66 lakh and 3.69 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the 56,000 strike holds the maximum Call open interest, with 17.45 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 55,500 strike (14.98 lakh contracts) and the 57,000 strike (13.49 lakh contracts).

Maximum Call writing was observed at the 55,300 strike (with the addition of 5.43 lakh contracts), followed by the 55,500 strike (5.37 lakh contracts), and the 55,400 strike (4.27 lakh contracts). The maximum Call unwinding was seen at the 57,200 strike, which shed 33,810 contracts, followed by 54,000 and 54,300 strikes, which shed 18,170 and 10,185 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the maximum Put open interest was placed at the 54,000 strike (with 16.08 lakh contracts), which can act as a key support level for the index. This was followed by the 55,000 strike (12.32 lakh contracts) and the 54,500 strike (9.13 lakh contracts).

The maximum Put writing was observed at the 54,800 strike (which added 94,290 contracts), followed by the 53,600 strike (64,225 contracts) and the 55,100 strike (55,685 contracts). The maximum Put winding was seen at the 55,000 strike, which shed 3.7 lakh contracts, followed by the 55,500 and 55,600 strikes, which shed 2.64 lakh and 1.92 lakh contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, declined to 0.87 on September 24, compared to 0.97 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, dropped by 0.96 percent to the 10.52 level after a three-day uptrend, sustaining around the short-term moving averages. This indicates low volatility expectations in the near term.

10) Long Build-up (26 Stocks)

A long build-up was seen in 26 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (48 Stocks)

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

12) Short Build-up (119 Stocks)

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

13) Short-Covering (19 Stocks)

19 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: HFCL, RBL Bank, Sammaan Capital

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.

Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.