Nifty Trade Setup: September 16 Insights
The Indian stock market closed on a positive note yesterday, showing a modest advancement in the Nifty 50 index, which rose by 27 points to settle at 25,384. Notably, this trading day also saw the index achieve a new intraday high. The formation of higher tops and bottoms is crucial, indicating a potential uptrend. However, the index has been facing resistance at the 25,400 level for three consecutive days, suggesting that the market may remain in a consolidation phase until it decisively closes above this hurdle.
Key Market Levels to Monitor
Experts believe that the 25,500 to 25,600 zone is critical for the Nifty’s upward movement. Consequently, this region warrants close observation. In contrast, the 25,300 to 25,200 range is expected to provide support during potential market corrections.
Support and Resistance Levels
| Type | Levels |
|---|---|
| Support (Pivot Points) | 25,347, 25,321, 25,279 |
| Resistance (Pivot Points) | 25,430, 25,456, 25,498 |
Bank Nifty Insights
Key Levels for Bank Nifty
| Type | Levels |
|---|---|
| Support (Pivot Points) | 51,985, 51,917, 51,807 |
| Resistance (Pivot Points) | 52,204, 52,272, 52,382 |
| Resistance (Fibonacci Retracement) | 52,569, 53,353 |
| Support (Fibonacci Retracement) | 51,639, 50,582 |
Options Data Overview
Nifty Call and Put Option Data
Nifty Call Options: The maximum open interest for calls stands at 96.06 lakh contracts at the 26,000 strike price, reinforcing it as a key resistance level in upcoming sessions.
Nifty Put Options: Conversely, the maximum open interest for puts, which can provide essential support, is recorded at 59.33 lakh contracts at the 25,000 strike price.
Bank Nifty Options Data
Bank Nifty Call Options: For Bank Nifty, the peak in call open interest occurs at the 53,000 strike with 26.32 lakh contracts, marking a significant resistance level.
Bank Nifty Put Options: On the put side, the maximum open interest is found at the 51,000 strike, amounting to 27.76 lakh contracts, indicating key support for the upcoming sessions.
Market Sentiment Analysis
In a recent update, the India VIX, also known as the Fear Index, decreased by 0.72% to 12.46. This represents the lowest level since July 26, indicating reduced volatility and potentially more stable conditions for market participants.
Investor Activity Insights
High Delivery Trades
A significant share of delivery trades has been noted in various stocks, reflecting strong investor interest as opposed to short-term trading motives.
Long and Short Build-Up Analysis
On the last trading day, 49 stocks exhibited long build-up, indicating a bullish sentiment, whereas 33 stocks saw long unwinding, hinting at potential selling pressure. Additionally, 62 stocks experienced a short build-up, suggesting further downside for those positions, while 40 stocks showed signs of short covering, which might indicate a reversal in sentiment for those particular stocks.
Put Call Ratio Insights
The Nifty put-call ratio dropped to 1.26 on September 16, down from 1.33 in the previous session, suggesting a shift in market sentiment. Generally, a PCR above 1 indicates bullishness, while a decline towards 0.7 may be interpreted as bearish sentiment.
F&O Ban Stocks
The following stocks are currently under F&O ban due to exceeding 95% of the market-wide position limit: Birlasoft, GNFC, and LIC Housing Finance. Stocks that are already under this ban include Aarti Industries, Balrampur Chini Mills, Bandhan Bank, Chambal Fertilizers & Chemicals, Granules India, Hindustan Copper, and RBL Bank. No stocks were removed from the F&O ban recently.
Conclusion
As we navigate through this period of consolidation, investors should remain vigilant about key support and resistance levels. Monitoring the evolving options data can provide invaluable insights into market sentiment, helping traders and investors make informed decisions. Stay alert for potential movements as the market approaches critical levels in the coming days.
