Derivative Market Recap: Nifty Slips as Sector Rotation Dominates
Market Recap
After a flat start, Nifty faced immediate selling pressure, slipping below 24,800. It remained range bound between 24,715–24,800 for the rest of the day and ended with a loss of 0.33%. The Nifty Midcap 100 outperformed slightly, closing almost flat with a marginal loss of 0.06%.
Options Market Insights
| Metrics | Levels |
|---|---|
Significant Call side OI | 25,000 Call |
Significant Put side OI | 24,500 & 24,800 Put |
Put-Call Ratio (PCR) | 0.580 |
Max Pain | 24,800 |
VWAP Range | 24,595 – 25,015 |
Sentiment:
Higher Call writing compared to Put writing → Cautious Undertone
Index Futures Positioning
| Index | Position Change (Contracts) |
|---|---|
Nifty Futures | -6,011 |
BankNifty Futures | -207 |
MidcapNifty Futures | +349 |
FinNifty Futures | +155 |
NiftyNext50 Futures | -7 |
Technical Outlook
In the past week, the benchmark indices displayed lacklustre activity. The Nifty closed down 0.41%, while the Sensex fell by 270 points. Among various sectors, the PSU Bank index performed the best, gaining over 4%, while the FMCG index suffered the largest loss, dropping 2.29%. The week began on a positive note, but as the market progressed, profit booking at higher levels emerged. On the weekly charts, a small bearish candle has formed, and the intraday charts show a weak formation, which is negative.
Key Support and Resistance Levels:
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20-day Simple Moving Average (SMA) and the level of 24,650 would serve as key support zones for short-term traders, while the 25,150 level could act as a significant resistance area for the bulls.
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As long as the market remains within the range of 24,650 and 24,900, a sideways, range-bound trend is expected to persist.
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If there is a successful breakout above 24,900, it could push the market towards 25,150.
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Conversely, if the market breaches the 24,650 level, it could shift sentiment, leading to a retest of levels around 24,450.
Below is a visual representation of the Nifty’s key levels:
However, if there is a crossing of 25,150 or a break of 24,450, we can expect the market to enter a trending mode. In that case, it may jump to 25,650 or fall to 23,900. The strategy should be to design a trading plan accordingly with minimal stop losses.
Bank Nifty Outlook
For the Bank Nifty, higher bottom support is established at 55,000. If it holds above this level, the uptrend is likely to continue towards 56,100 to 56,500. However, should it fall below 55,000, the uptrend may become vulnerable, potentially leading to a correction down to the range of 54,700 to 54,300.
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