The momentum, which has picked up pace, especially after hitting the low around 21,800 and continued for three days in a row, is expected to be seen in the coming sessions too. The Nifty 50 inched closer to 22,300 on May 14 and the same is expected to be a hurdle on the higher side as closing above the same can take the index to 22,400-22,500, with support at 22,100-22,000 levels, experts said.
The higher high, higher low formation, defending the rising support trendline and the uptrend in momentum indicator RSI (relative strength index rising to 47 from 38 levels on May 9) are some of key factors that supported the momentum.
On May 14, the BSE Sensex rallied 328 points to 73,105, while the Nifty 50 rose 114 points to 22,218 and formed a bullish candlestick pattern on the daily charts.
"On intraday charts, it is holding higher bottom formation, which is largely positive. We are of the view that the index has completed one leg of pullback rally and now 50-day SMA or 22,300 would act as key resistance areas for the bulls," Shrikant Chouhan, head equity research at Kotak Securities said.
For traders, he feels above 22,300, the next hurdle would be 22,400-22,425. On the flip side, fresh selloff is possible only after dismissal of 22,100 as below which, the index could retest the level of 22,050-22,000, he said.
Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas also feels the upmove is likely to continue till 22,308 – 22,423 which is the 50 percent and 61.82 percent Fibonacci retracement level of the previous fall. On the downside, 22,040 – 22,000 is a crucial support from short-term perspective, he said.
The broader markets outperformed the benchmark indices as the Nifty Midcap 100 and Smallcap 100 indices gained 1 percent and 2 percent respectively.
Here are 15 data points we have collated to help you spot profitable trades
Key support and resistance levels for the Nifty
The pivot point calculator indicates that the Nifty 50 is expected to face resistance at the 22,262 level, followed by 22,306 and 22,379 points. On the lower side, the index may take immediate support at the 22,118 level, followed by 22,073 and 22,001 points.
Key support and resistance levels for the Bank Nifty
Meanwhile, the Bank Nifty also participated in the market uptrend, rising 105 points to 47,859 and formed a bullish candlestick pattern on the daily charts. The index climbed for yet another session with the formation of a higher high, a higher low.
"The banking index can continue with the positive momentum till 48,130 – 48,480 which are the key Fibonacci retracement levels," Jatin Gedia said. Crucial support is placed at 47,500 – 47,470, he added.
According to the pivot point calculator, the Bank Nifty index may see resistance at 47,927, followed by 48,005 and 48,131. On the lower side, the index is likely to take support at 47,676, followed by 47,598 and 47,472.
According to the weekly options data, the 23,000 strike owned the maximum Call open interest, with 66.02 lakh contracts. This level can act as a key resistance for the Nifty in the short term. It was followed by the 22,500 strike, which had 63.23 lakh contracts, while the 22,600 strike had 60.22 lakh contracts.
Maximum Call writing was observed at the 22,600 strike, which saw an addition of 23.11 lakh contracts. It was followed by 22,500 and 22,700 strikes that added 10.82 lakh and 7.9 lakh contracts.
The maximum Call unwinding was visible in the 22,100 strikes, which shed 10.5 lakh contracts, followed by 22,000 and 23,200 strikes, which shed 8.45 lakh and 7.27 lakh contracts, respectively.
On the Put side, the maximum open interest was seen at 22,000 strike, which can act as a key support level for the Nifty with 57.09 lakh contracts. It was followed by the 21,000 strike, comprising 55.97 lakh contracts, and then the 21,500 strike, with 50.18 lakh contracts.
The maximum Put writing was visible at the 22,100 strike, which saw an addition of 25.19 lakh contracts, followed by 22,200 and 22,000 strikes, with 20.07 lakh and 16.8 lakh contract additions, respectively.
Put unwinding was observed at the 20,800 strike, which shed 6.06 lakh contracts. This was followed by 21,100 and 20,500 strikes, with a reduction of 5.98 lakh and 3.57 lakh contracts, respectively.
The maximum Call open interest was seen at 49,000 strike, with 35.81 lakh contracts. This level can act as a key resistance for the Nifty in the short term. It was followed by the 48,000 strike, which had 33.06 lakh contracts, while the 48,500 strike owned 28.34 lakh contracts.
Maximum Call writing was visible at the 49,000 strike, which saw an addition of 13.05 lakh contracts. It was followed by 48,500 and 48,800 strikes that added 10.09 lakh and 7.48 lakh contracts.
The maximum Call unwinding was observed in the 47,500 strike, which shed 2.88 lakh contracts, followed by 47,000 and 47,400 strikes, which shed 1.17 lakh and 69,765 contracts, respectively.
On the Put side, the 47,000 strike owned the maximum open interest, which can act as a key support level for the Nifty with 24.43 lakh contracts. It was followed by the 47,500 strike, comprising 22.51 lakh contracts, and then the 47,800 strike, with 15.48 lakh contracts.
The maximum Put writing was seen at the 46,500 strike, which saw an addition of 11.53 lakh contracts, followed by 47,900 and 47,800 strikes, with 6.01 lakh and 5.29 lakh contract additions, respectively.
Put unwinding was observed at the 48,500 strike, which shed 29,340 contracts. This was followed by 48,600 and 48,400 strikes, with a reduction of 16,740 and 3,375 contracts, respectively.
Funds Flow (Rs crore)
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, rose to 1.02 on May 14, from 0.97 levels in the previous session.
The increasing PCR or higher than 0.7 or surpassing 1 means traders are selling more Put options than Calls 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.
India VIX
The market participants will have to keep an eye on the India VIX, the fear index, which remained above 20 mark, though corrected by 1.97 percent to 20.20 levels on Tuesday, from 20.6 levels. The index had risen 102 percent in the previous 13 consecutive trading sessions, before Tuesday's fall.
A long build-up was seen in 66 stocks, including Birlasoft, Shree Cement, Oberoi Realty, ABB India, and Marico. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 27 stocks saw long unwinding, which included Cholamandalm Investment and Finance, UPL, Polycab India, Muthoot Finance, and Godrej Consumer Products. A decline in OI and price indicates long unwinding.
27 stocks see a short build-up
A short build-up was seen in 27 stocks, including PVR INOX, Berger Paints, Divis Laboratories, Zydus Lifesciences, and Alkem Laboratories. An increase in OI, along with a fall in price, points to a build-up of short positions.
Based on the OI percentage, 66 stocks saw short-covering, which included HDFC AMC, Hindustan Copper, Can Fin Homes, Havells India, and Mphasis. A decrease in OI, along with a price increase, is an indication of short-covering.
Stocks with high delivery percentage
A high delivery percentage reflects investor interest in a stock. Max Financial Services, Sun Pharmaceutical Industries, Kotak Mahindra Bank, IndiaMART InterMESH, and JK Cement saw the highest delivery among the F&O stocks.
Stocks under F&O ban on NSE
The NSE has added Birlasoft to the F&O ban list for May 15, while retaining Balrampur Chini Mills, Canara Bank, GMR Airports Infrastructure, Hindustan Copper, Vodafone Idea, Piramal Enterprises, SAIL, and Zee Entertainment Enterprises to the said list. Punjab National Bank was removed from the said list.
Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
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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