Trade Setup for January 28: A bearish sentiment persists

The Nifty 50 index has faced significant bearish pressure, breaking below the 23,000 mark for the first time since June 2024. This move marks the completion of a trendline breakdown on January 27, strengthening the bearish sentiment, particularly as the market approaches the Union Budget. Alongside weak market breadth, a rising VIX adds further concern. As long as the Nifty stays below the 23,000 level, bears may continue to dominate, with potential support seen near the 22,500 zone. However, any bounce-back could encounter resistance in the 22,900-23,000 range, followed by the 23,200 mark.

Here are 15 crucial data points for your trading decisions:

Nifty 50 Key Levels (22,829)

Resistance: 22,959, 23,011, 23,095

Support: 22,790, 22,738, 22,654

The Nifty 50 formed a bearish candlestick pattern on the daily charts, trading below all key moving averages (10, 20, 50, 100, 200-day EMAs). RSI is at 33.77, and MACD remains well below the zero line, signaling weakness.

Bank Nifty Key Levels (48,065)

Resistance: 48,257, 48,370, 48,551

Support: 47,894, 47,782, 47,601

The Bank Nifty broke its support trendline, forming a bearish pattern with a long upper shadow on the daily chart. Momentum indicators are negative, confirming a bearish trend.

Nifty Call Options Data

Maximum Call open interest at 23,000 (83.96 lakh contracts), acting as a key resistance level. Maximum Call writing was observed at the 23,000 strike, followed by 22,900 and 23,100 strikes.

Nifty Put Options Data

Maximum Put open interest at the 22,000 strike (96.01 lakh contracts), providing significant support. Maximum Put writing was at the 22,400 strike.

Bank Nifty Call Options Data

Maximum Call open interest at the 50,000 strike (31.16 lakh contracts), indicating resistance. Maximum Call writing occurred at the 49,000 strike.

Bank Nifty Put Options Data

Maximum Put open interest at the 47,000 strike (26.02 lakh contracts), which is key support for the index. Maximum Put writing was seen at the 47,000 strike.

Funds Flow

Fund flows reveal key insights into investor sentiment and institutional activity in the market.

Put-Call Ratio (PCR)

The Nifty PCR has dropped to 0.75, reflecting a bearish sentiment. A ratio below 0.7 indicates more Call selling than Put selling, which aligns with the current market mood.

India VIX

The India VIX surged by 8.29% to 18.13, signaling heightened market volatility ahead of the Budget.

Long Build-up in 7 Stocks

Open interest increases in 7 stocks, suggesting the build-up of long positions.

Long Unwinding in 114 Stocks

A decline in open interest along with falling prices indicates long unwinding in 114 stocks.

Short Build-up in 90 Stocks

An increase in open interest with falling prices points to short positions in 90 stocks.

Short-Covering in 16 Stocks

A decrease in open interest with rising prices suggests short-covering in 16 stocks.

High Delivery Trades

Stocks with a high proportion of delivery trades reflect long-term investment interest.

Stocks Under F&O Ban

Stocks currently under F&O ban: IndiaMART InterMESH, Manappuram Finance, Mahanagar Gas, Punjab National Bank.

Stocks removed from F&O ban: Aditya Birla Fashion & Retail, Bandhan Bank, Can Fin Homes, Dixon Technologies, L&T Finance.

Disclaimer: Always consult certified professionals before making investment decisions.