Dalal Street week ahead: The Nifty 50 is unlikely to see a major uptrend; volatility sees a significant drop

The Nifty 50 index is unlikely to see a major uptrend until it decisively closes above 24,800, which is the 50-day Exponential Moving Average (EMA), and volatility decreases significantly. Until then, rangebound trading is expected, with immediate resistance at the 24,450-24,500 zone and support at the 24,000 mark, according to experts.

Nifty Trade Setup

The Nifty 50 index rebounded after a couple of days of correction, making a positive start to the November series on November 1. The index gained half a percent with very low volume on the Muhurat trading day, closing just above 24,300. For the week, the index snapped a four-week losing streak, defending the previous week's low, which is a positive sign. However, a major uptrend is unlikely until it closes decisively above 24,800 and volatility sees a significant drop. Until then, rangebound trading may continue, with immediate resistance at the 24,450-24,500 zone and support at the 24,000 mark.

Key Levels for the Nifty 50 (24,304)

Resistance based on pivot points: 24,312, 24,372, and 24,406

Support based on pivot points: 24,284, 24,263, and 24,230

Special Formation: The Nifty 50 formed a Doji-like candlestick pattern on the daily charts, indicating indecisive buyers and sellers regarding the future market trend. The index remains below the 10-, 20-, 50-, and 100-day EMAs, which is a negative sign, though the momentum indicator RSI (Relative Strength Index) shows a positive crossover. For the week, the index formed a small bullish candlestick pattern with upper and lower shadows, resembling a Doji-like pattern on the weekly timeframe, while defending the previous week's low, which is a positive sign.

Key Levels for the Bank Nifty

Resistance based on pivot points: 51,707, 51,879, and 52,019

Support based on pivot points: 51,513, 51,427, and 51,287

Resistance based on Fibonacci retracement: 52,332, 52,835

Support based on Fibonacci retracement: 51,258, 50,264

Special Formation: The Bank Nifty formed a bullish candlestick pattern with a small upper shadow on the daily timeframe, climbing above the middle of the Bollinger band, which is a positive sign as long as it sustains above it. It traded within the previous day's range, rising 199 points to 51,674. On the weekly scale, the index gained 1.75 percent with strong volumes and reported a bullish candlestick pattern with an upper shadow, indicating some selling pressure at higher levels, but it defended the previous week's low.

Nifty Call Options Data

According to the weekly options data, the 24,800 strike holds the maximum open interest (with 44.11 lakh contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 24,300 strike (40.74 lakh contracts) and the 25,000 strike (40.13 lakh contracts).

Maximum Call writing was observed at the 25,500 strike, which saw an addition of 6.61 lakh contracts, followed by the 25,000 and 24,400 strikes, which added 5.7 lakh and 5.3 lakh contracts, respectively. The maximum Call unwinding was seen at the 24,200 strike, which shed 1.1 lakh contracts, followed by the 24,000 and 24,100 strikes, which shed 48,225 and 10,625 contracts, respectively.

Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 24,300 strike (with 33.22 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 24,200 strike (32.22 lakh contracts), and the 24,000 strike (31.66 lakh contracts).

The maximum Put writing was placed at the 24,300 strike, which saw an addition of 8.4 lakh contracts, followed by the 23,700, and 23,800 strikes, with 5.69 lakh, and 3.64 lakh contracts added, respectively, while there was hardly any Put unwinding seen.

Bank Nifty Call Options Data

According to the weekly options data, the 53,000 strike holds the maximum open interest, with 20.46 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 52,000 strike (20.28 lakh contracts) and the 52,500 strike (18.3 lakh contracts).

Maximum Call writing was visible at the 51,700 strike (with the addition of 1.97 lakh contracts), followed by the 51,800 strike (1.02 lakh contracts) and the 53,000 strike (96,930 contracts), while the maximum Call unwinding was seen at the 51,500 strike, which shed 87,060 contracts, followed by the 52,500 and 51,400 strikes, which shed 35,070 and 28,800 contracts, respectively.

Bank Nifty Put Options Data

On the Put side, the maximum open interest was seen at the 51,500 strike (with 9.54 lakh contracts), which can act as a key support level for the index. This was followed by the 51,000 strike (8.93 lakh contracts) and the 52,000 strike (6.76 lakh contracts).

The maximum Put writing was observed at the 51,700 strike (which added 1.09 lakh contracts), followed by the 50,600 strike (81,930 contracts) and the 51,800 strike (68,475 contracts), while the maximum Put unwinding was seen at the 51,500 strike, which shed 60,945 contracts, followed by the 52,000 and 51,900 strikes, which shed 50,085 and 31,725 contracts, respectively.

Funds Flow (Rs crore)

Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, rose to 1.07 on November 1, from 1.05 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.

India VIX

Volatility extended its upward journey for the fourth consecutive session and continued to hit fresh two-and-a-half-month highs, making the trend uncomfortable for bulls. The India VIX rose by 2.27 percent to the 15.9 level, sustaining above all key moving averages, which is a negative sign for bulls.

Long Build-up (64 Stocks)

A long build-up was seen in 64 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

Long Unwinding (20 Stocks)

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

Short Build-up (47 Stocks)

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

Short-Covering (47 Stocks)

47 stocks saw short-covering, meaning a decrease in OI, along with a price increase.

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.

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: Nil

Stocks removed from F&O ban: Nil

Disclaimer: BizzBuzz News advises users to check with certified experts before taking any investment decisions.