Nifty 50 Trade Setup for April 27
Given the bearish sentiment, the 23,700 level is the immediate support to watch for the Nifty 50, followed by 23,500 as a crucial support. However, in case of a rebound, 24,000 can act as an immediate hurdle, followed by the crucial resistance of 24,200. Sustaining above this level could open the door for 24,600.
The Nifty 50 fell 1.14 percent on April 24, extending its correction for the third straight day due to weak domestic and global cues. Given the West Asia tensions-led elevated oil prices, weakening momentum indicators, and the index falling below short-term moving averages, the 23,700 level is the immediate support to watch, followed by 23,500 as a crucial support (near the previous week’s low). However, in case of a rebound, 24,000 can act as an immediate hurdle, followed by the crucial resistance of 24,200 (50 DEMA). Sustaining above this level could open the door for 24,600, according to experts.
Key Levels for the Nifty 50
Resistance based on pivot points: 24,122, 24,215, and 24,365
Support based on pivot points: 23,823, 23,730, and 23,580
Special Formation: The Nifty 50 formed a red candle with minor shadows on both sides and continued its lower-high structure for the third straight session, indicating bearish sentiment. The index falling below medium- and short-term moving averages, as well as below the 23.6 percent Fibonacci retracement (of the sharp rally from April 2), further supported the bears. The RSI falling to 49.21 signaled a bearish crossover. The MACD inclined downward, though it stayed above the zero and signal lines, with a further fade in the histogram’s green bars. All this indicates continued weakness and a negative bias in the near term.
Key Levels for the Bank Nifty
Resistance based on pivot points: 56,371, 56,539, and 56,810
Support based on pivot points: 55,829, 55,661, and 55,390
Resistance based on Fibonacci retracement: 57,195, 59,169
Support based on Fibonacci retracement: 55,676, 54,576
Special Formation: The Bank Nifty declines just 0.38 percent on Friday, and formed a small-bodied bearish candle with long upper and lower shadows on the daily timeframe, indicating selling pressure at higher levels as well as buying interest at lower levels. Further, there was a breakdown from a rising wedge pattern, and the index recently tested its swing low. The index still held above the 20-day EMA as well as the 23.6 percent Fibonacci retracement, though it traded well below medium- and long-term moving averages. The RSI at 52.27 showed a negative crossover, while the MACD remained above the zero and signal lines, though the histogram’s green bars continued to shrink. All this indicates a cautious to slightly negative undertone despite relative outperformance to Nifty 50.
Nifty Call Options Data
According to the monthly options data, the maximum Call open interest was seen at the 24,500 strike (with 1.16 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 24,200 strike (88.81 lakh contracts) and 24,000 strike (85.6 lakh contracts).
Maximum Call writing was observed at the 24,000 strike, which saw an addition of 51.29 lakh contracts, followed by the 23,900 and 24,100 strikes, which added 38.42 lakh and 34.65 lakh contracts, respectively. The maximum Call unwinding was seen at the 23,300 strike, which shed 41,015 contracts, followed by the 23,200 strike, which shed 7,735 contracts.
Nifty Put Options Data
On the Put side, the 24,000 strike holds the maximum Put open interest (with 62.32 lakh contracts), which can act as a key level for the Nifty in the short term. It was followed by the 23,500 strike (61.28 lakh contracts) and the 23,900 strike (54.05 lakh contracts).
The maximum Put writing was placed at the 23,900 strike, which saw an addition of 23.15 lakh contracts, followed by the 23,200 and 23,800 strikes, which added 11.1 lakh and 9.65 lakh contracts, respectively. The maximum Put unwinding was seen at the 24,200 strike, which shed 18.11 lakh contracts, followed by the 24,150 and 24,400 strikes, which shed 10.88 lakh and 10.3 lakh contracts, respectively.
Bank Nifty Call Options Data
According to the monthly options data, the maximum Call open interest was seen at the 57,000 strike, with 8.14 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 56,500 strike (6.7 lakh contracts) and the 57,500 strike (6.29 lakh contracts).
Maximum Call writing was observed at the 56,000 strike (with the addition of 1.82 lakh contracts), followed by the 56,200 strike (1.39 lakh contracts) and 56,300 strike (1.06 lakh contracts). The maximum Call unwinding was seen at the 57,300 strike, which shed 41,490 contracts, followed by the 55,000 and 56,700 strikes, which shed 23,430 and 20,820 contracts, respectively.
Bank Nifty Put Options Data
On the Put side, the 55,000 strike holds the maximum Put open interest (with 7.24 lakh contracts), which can act as a key support level for the index. This was followed by the 56,000 strike (6.57 lakh contracts) and the 57,000 strike (6.03 lakh contracts).
The maximum Put writing was placed at the 55,500 strike (which added 83,520 contracts), followed by the 56,100 strike (66,810 contracts) and 55,800 strike (57,780 contracts). The maximum Put unwinding was seen at the 56,500 strike, which shed 71,910 contracts, followed by the 57,000 and 55,700 strikes, which shed 68,880 and 54,510 contracts, respectively.
Conclusion
In conclusion, the Nifty 50 and Bank Nifty are expected to be volatile in the short term, with key levels to watch being 23,700, 23,500, 24,000, and 24,200 for the Nifty 50, and 56,371, 56,539, and 56,810 for the Bank Nifty. Investors should keep an eye on the oil prices and global cues to make informed investment decisions. Additionally, they should consider the Nifty call options data and Nifty put options data to gauge market sentiment.
It is also important to keep an eye on the India VIX, which jumped 6.04 percent to near the 20 level at 19.71, indicating a concern for bulls. A rise and sustained move above the 20 level could pose further risk for bulls, while a decisive fall below the 16 level could provide some comfort to the bullish camp.
Finally, investors should consider the long build-up stocks and short build-up stocks to identify potential investment opportunities.