The Nifty 50 lost ground in the last hour of trade amid consistent volatility, maintaining a downward move for the third consecutive session on May 28. The index failed to surpass 23,000 and closed just below 22,900. Market participants preferred to book profits, and bulls seem to be cautious given the rising volatility to a fresh two-year high. Even the chart formations indicated the exhaustion of bullish strength, which might attract a price-wise correction post-rally, experts believe. On the levels front, 23,000 is expected to be a crucial hurdle for the index as it needs to give a strong close above this level for a rally towards 23,100-23,200. Until then, consolidation may continue with immediate support at 22,800, and then 22,600 levels.
The Nifty 50 fell 44 points to 22,888 and formed a bearish candlestick pattern on the daily charts, with a lower high-lower low formation. Meanwhile, the Bank Nifty saw a correction for the first time in the last four consecutive sessions, declining 140 points to 49,142 on profit booking. The index saw a bearish candlestick pattern on the daily timeframe, but experts feel overall, the trend remains in favour of bulls, and one should not be worried due to Tuesday’s profit-taking, which was on expected lines after the recent rally.
1) Key Levels For The Nifty 50
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Resistance based on pivot points: 22,969, 23,002, and 23,055
Support based on pivot points: 22,862, 22,829, and 22,775
Special Formation: The index traded well above all key moving averages despite consolidation with a negative bias near the psychological 23,000 mark.
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2) Key Levels For The Bank Nifty
Resistance based on pivot points: 49,411, 49,521, and 49,700
Support based on pivot points: 49,054, 48,943, and 48,765
Resistance based on Fibonacci retracement: 49,340, 49,975
Support based on Fibonacci retracement: 49,050, 48,658
Special Formation: The Bank Nifty remained above the 49,000 mark, taking support at around 49,050 for another session. It also traded above all key moving averages and remained near the upper end of the Bollinger band.
According to the monthly options data, the 24,000 strike continued to hold the maximum Call open interest. This level can act as a key resistance level for the Nifty in the short term. It was followed by the 23,500 strike and the 23,000 strike.
Maximum Call writing was seen at the 23,000 strike, followed by the 23,500 and 23,100 strikes, while the maximum Call unwinding was visible at the 23,900 strike, followed by the 22,500 and 22,700 strikes.
On the Put side, the maximum open interest was seen at the 22,500 strike, which can act as a key support level for the Nifty. It was followed by the 23,000 strike and then the 22,000 strike.
The maximum Put writing was observed at the 22,400 strike, followed by the 22,100 and 22,000 strikes, while the Put unwinding was seen at the 23,000 strike, followed by the 23,100 and 23,300 strikes.
5) Bank Nifty Call Options Data
According to the monthly options data, the maximum Call open interest remained at the 50,000 strike. This can act as a key resistance level for the index in the short term. It was followed by the 49,500 strike and the 49,600 strike.
Maximum Call writing was visible at the 49,200 strike, followed by the 49,600 and 49,500 strikes, while the maximum Call unwinding was observed at the 48,600 strike, followed by the 48,500 and 48,800 strikes.
6) Bank Nifty Put Options Data
On the Put side, the 49,000 strike holds the maximum open interest, which can act as a key support level for the index. This was followed by the 48,500 strike and then the 49,100 strike.
The maximum Put writing was observed at the 49,100 strike, followed by the 48,700 and 49,200 strikes, while the 49,400 strike witnessed the maximum Put unwinding, followed by the 49,500 strike.
7) Funds Flow (Rs crore)
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, dropped further to 0.94 on May 28 from 1.02 levels 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
Volatility hit a fresh two-year high on Tuesday, especially ahead of the exit polls and Lok Sabha election results. It is likely to remain on the higher side until the end of this mega event – the election. The India VIX jumped 4.32 percent to 24.20, the highest closing level since May 25, 2022.
A long build-up was seen in 23 stocks, including Coromandel International, Exide Industries, Aditya Birla Fashion & Retail, HDFC AMC, and Max Financial Services. An increase in open interest (OI) and price indicates a build-up of long positions.
11) Long Unwinding (75 Stocks)
36 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.
12) Short Build-up (42 Stocks)
42 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.
13) Short-Covering (46 Stocks)
46 stocks saw short-covering, meaning a decrease in OI, along with a price increase.
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: Aditya Birla Fashion & Retail
Stocks retained in F&O ban: Biocon, Hindustan Copper, Vodafone Idea, and Piramal Enterprises
Stocks removed from F&O ban: GNFC
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