Rishabh Kale

On December 19, the Nifty 50 declined by 1 percent but held above the 23,900 supports, reflecting resilience amid weak sentiment. Elevated India VIX levels indicate caution, while a bullish candlestick pattern near the Bollinger Band's lower end suggests possible consolidation. Key resistance levels include 24,050 and 24,350, with support at 23,900 and 23,700. The Put-Call Ratio rose to 0.91, signalling bullish sentiment, but momentum indicators suggest a cautious approach. Traders should watch for a break above 24,050 for bullish confirmation or below 23,700 for potential downside.

The Nifty’s current technical setup and OI data indicate a bearish sentiment in the short term. The lower high-lower low formation and negative RSI crossover reflect sustained selling pressure, while elevated volatility levels further dampen bullish momentum. However, oversold conditions, as indicated by the exceptionally low Put-Call Ratio (PCR) of 0.55, hint at the possibility of a short-term relief rally if key support levels are respected. Market participants are advised to stay vigilant, considering the heightened uncertainty. For bullish traders, a decisive breakout above 24,200 can offer opportunities to target 24,500, provided the India VIX declines and market momentum strengthens. On the other hand, bearish traders should focus on selling opportunities below 24,150, with a potential downside towards the 24,000-23,900 support zone. As the market remains vulnerable to volatility, adhering to disciplined risk management practices is critical for navigating current conditions effectively. Disclaimer This report is for informational purposes only and should not be considered as financial advice. Trading in the stock market involves risks, and past performance is not indicative of future results. Readers are advised to consult their financial advisors before making any trading or investment decisions.

WEEKLY DERIVATIVE INSIGHT  Benchmark Indices broke the four-week winning streak with Nifty closing sharply lower by 4.8% at 23587. The overall OI in the derivative segment increased by 7.4% from Rs. 22,40,846 cr to Rs. 24,06,398 cr. Nifty futures OI in number of shares increased by 16% from 1.26 cr to 1.46 cr simultaneously Nifty futures premium shed by 24 points. Nifty PCR ratio decreased from 1.12 to 0.80. Indian VIX closed for the week higher by 3.9% at 15.07. On the upside, 17 is the immediate resistance level to eye. On the downside, 11.50 is the immediate support level to watch out for. Stocks that saw a long buildup for the week were Prestige, Coromandel, Drreddy, Ipcalab, Lupin, and United Spirit. Stocks that saw a short buildup for the week were Lodha, Tata Elxsi, JSWEnergy, Adani Green, Oil, Zomato, KPIT Tech, Poonawalla, Federal Bank, and Jio Finance. 25000 strike price has the highest OI among the Nifty December month-end call option, with an OI of 136.07 lakhs. For the week, 23500, 23600, and 23700 call options saw the addition of 7.6 lakhs, 14.8 lakhs, and 19.1 lakhs, respectively, with IV decreasing, indicating the writing of an option. 23000 strike price has the highest OI among the Nifty December month-end put option, with an OI of 82.10 lakhs. For the week, 23500, 23600, and 23700 put options saw the addition of 27.7 lakhs, 21.7 lakhs, and 11.2 lakhs, respectively, with IV decreasing, indicating the writing of an option. In the derivative segment for the week, FIIs were net sellers in the index futures to the tune of Rs. 6,003 cr, with OI increasing by Rs. 2,740 cr compared to net selling of Rs. 1,374 cr, with OI decreasing by Rs. 1,796 cr in the previous week, indicating a short buildup. FIIs unwound 16581 long contracts and added 71239 short contracts in index futures, indicating a long unwinding and a short buildup in the current week. FIIs net long exposure in index futures stood at 31.2% vs. 32.8% at the beginning of the December series. In the stock futures, FIIs were net sellers to the tune of Rs. 14,622 cr, with OI decreasing by Rs. 10,216 cr compared to net selling of Rs. 8,103 cr, with OI increasing by Rs. 2,325 cr in the previous week, indicating a long unwinding. As mentioned in last week’s report, Nifty failed to cross the resistance of 24857 and broke the support level of 24180 and closed with a cut of 4.8% for the week.  Looking at the option data and FII statistics, 24200 is the immediate resistance level to watch out for. On the downside, 23263 is the support level or target to eye, and below that, 23000 is the next level.

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WEEKLY DERIVATIVE INSIGHT  Benchmark Indices continued the uptrend for the seventh consecutive week, with Nifty closing marginally higher by 0.1% at 24530. The overall OI decreased by 10.7% from Rs. 20,16,538 crores to Rs. 18,00,994 crores.  Nifty futures OI in number of shares increased by 10.5% from 1.60 crores to 1.77 crores, while Nifty futures premium decreased by 21 points. Nifty PCR ratio decreased from 1.28 to 1.11. Indian VIX closed for the week at 14.83, up by 8%. On the upside, 15.50 is the immediate resistance level to watch out for. On the downside, 10 is the support level to watch out for. Stocks that saw a long buildup for the week were India Cement, Syngene, Pageind, ITC, Colpal, ICICIGI, Auro Pharma, and ONGC. Stocks that saw a short buildup for the week were India Mart, Navin Fluoro, HDFCAMC, Concor, LTTS, Jindal Steel, Metropolis, PVRInox, Tata Steel, Asian Paint, Recltd, Cummins, Alkem, and LTF. 25500 strike price has the highest OI among the Nifty July month-end call option, with an OI of 81.43 lakhs. For the week, 24500, 24600, and 24700 call options saw the addition of 4.4 lakhs, 26.8 lakhs, and 21.2 lakhs, respectively, with IV increasing, indicating the buying of an option. 24000 strike price has the highest OI among the Nifty July month-end put option, with an OI of 59.06 lakhs. For the week, 24500, 24600, and 24700 put options saw the addition of 19.9 lakhs, 17 lakhs, and 13.8 lakhs, respectively, with IV increasing, indicating the buying of an option. In the derivative segment for the week, FII were net buyers in the index futures to the tune of Rs. 1,842 crores, with OI increasing by Rs. 3,703 crores compared to net selling of Rs. 4,175 crores, with OI decreasing by Rs. 1,162 crores in the previous week, indicating a long buildup. FII added 46884 long contracts and 16119 short contracts in index futures, indicating a long and a short buildup in the current week.  FII net long exposure in index futures stood at 78.9% vs. 81.7% at the beginning of the July series. In the stock futures, FII were net buyers to the tune of Rs. 10,119 crores, with OI increasing by Rs. 5,996 crores compared to net selling of Rs. 3,101 crores, with OI increasing by Rs. 3,814 crores in the previous week, indicating a long buildup. As mentioned in the last week report, Nifty has achieved the target of 24700, making a high of 24855, and saw profit booking to close the week marginally higher by 0.1% at 24530. Looking at the option data and FII statistics, 24500 is the immediate support level to watch out for on Nifty, and below that, 24250-24141 are the other support levels. On the upside, above 24855, 25000-25200 are the levels to eye.

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