The Nifty 50 tried hard to hold on to the psychological 23,000 mark for the second consecutive session but failed, closing moderately in the red amid rising volatility as bulls gave up control to bears on May 27. This indicates that market participants may be maintaining a cautious approach ahead of the expiry of May derivative contracts and the exit polls due later in the week, although the trend remains in favour of bulls. Hence, the index is likely to consolidate around the 23,000 mark in the coming sessions and may once again attempt to hit the upper band of the rising channel (placed around 23,100-23,200). If the index manages to close and sustain above these levels, then 23,500 is the level to watch, with support at 22,800, experts said.
The Nifty 50 touched an intraday record high of 23,111 but lost ground in the last hour of trade, closing at 22,932, down 25 points, forming a bearish candlestick pattern on the daily charts.
Meanwhile, the Bank Nifty continued to perform better than the benchmark Nifty 50, rising 310 points, or 0.63 percent, to 49,281. The index reported a bullish candlestick pattern with a long upper shadow on the daily charts, indicating profit booking at higher levels.
Here are 15 data points we have collated to help you spot profitable trades:
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1) Key Levels For The Nifty 50
Resistance based on pivot points: 23,063, 23,120, and 23,211
Support based on pivot points: 22,880, 22,823, and 22,732
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Special formation: The index continued to see a higher highs formation for the 11th consecutive session and traded above all key moving averages despite selling pressure at higher levels, which is a positive sign.
2) Key Levels For The Bank Nifty
Resistance based on pivot points: 49,584, 49,735, and 49,978
Support based on pivot points: 49,097, 48,947, and 48,703
Resistance based on Fibonacci retracement: 49,331, 49,975
Support based on Fibonacci retracement: 49,046, 48,654
Special formation: The Bank Nifty maintained higher highs, higher lows formation for the third consecutive session and traded above all key moving averages, with a positive bias in the momentum indicator Relative Strength Index (RSI at 63.53).
According to the monthly options data, the maximum Call open interest remains at the 24,000 strike. 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 23,200 strike, followed by the 23,500 and 23,100 strikes, while the maximum Call unwinding was visible at the 22,800 strike, followed by the 22,700 and 22,500 strikes.
On the Put side, the 23,000 strike owned the maximum open interest, which can act as a key level for the Nifty. It was followed by the 22,500 strike and then the 22,000 strike.
The maximum Put writing was seen at the 22,400 strike, followed by the 22,100 and 22,000 strikes, while the Put unwinding was seen at the 21,900 strike, followed by the 21,700 and 21,300 strikes.
5) Bank Nifty Call Options Data
According to the monthly options data, the 50,000 strike continued to hold the maximum Call open interest, which can act as a key resistance level for the index in the short term. This was followed by the 50,500 strike and the 49,000 strike.
Maximum Call writing was visible at the 50,000 strike, followed by the 49,700 and 49,600 strikes, while the maximum Call unwinding was observed at the 49,000 strike, followed by the 48,800 and 48,500 strikes.
6) Bank Nifty Put Options Data
On the Put side, the maximum open interest was seen at the 49,000 strike, which can act as a key support level for the index. This was followed by the 48,500 strike and then the 49,500 strike.
The maximum Put writing was observed at the 49,500 strike, followed by the 49,000 and 49,200 strikes, while the 48,400 strike witnessed the maximum Put unwinding, followed by the 48,500 strike.
7) Funds Flow (Rs crore)
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, fell to 1.02 on May 27 from 1.14 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 remained on the higher side, reaching a two-year high on May 27 as it approaches the Lok Sabha election results. Experts expect it to remain elevated till the results day. The India VIX climbed 6.83 percent to 23.19, the highest closing level since May 25, 2022.
A long build-up was seen in 47 stocks, including HDFC AMC, Exide Industries, JK Cement, Ipca Laboratories, and Torrent Pharmaceuticals. An increase in open interest (OI) and price indicates a build-up of long positions.
11) Long Unwinding (36 Stocks)
36 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.
12) Short Build-up (44 Stocks)
44 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.
13) Short-Covering (59 Stocks)
59 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: Nil
Stocks retained in F&O ban: Biocon, GNFC, Hindustan Copper, Vodafone Idea, and Piramal Enterprises
Stocks removed from F&O ban: Bandhan Bank, India Cements, National Aluminium Company, and Punjab National Bank
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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