Call options dataAccording to the weekly options data, the 23,000 strike owned the maximum Call open interest, with 91.56 lakh contracts.
It was followed by the 22,800 strike, which had 84.47 lakh contracts, while the 22,700 strike had 72.05 lakh contracts.
It was followed by 22,600 and 23,100 strikes that added 17.92 lakh and 17.68 lakh contracts.
It was followed by the 22,500 strike, comprising 39.73 lakh contracts and then the 21,800 strike, with 39.15 lakh contracts.
Meaningful Put writing was seen at the 21,700 strike, which saw an addition of 9.31 lakh contracts, followed by 22,400 and 22,300 strikes, with 8.85 lakh and 8.7 lakh contracts additions, respectively.
Market Trend
The market trend turned in favour of bears with consistently significantly rising volatility and the formation of yet another bearish candle on the daily charts. As long as the Nifty 50 holds 22,300, the low of the long bull candle of April 25, the consolidation may continue in the coming sessions with hurdles on the higher side at 22,600 levels, but the breaking of 22,300 can raise the chance of weakness in the short term, experts said.
On May 6, the BSE Sensex rose 17 points to 73,896, while the Nifty 50 fell 33 points to 22,443 and formed a bearish candlestick pattern on the daily timeframe besides a long bear candle, with lower highs formation.
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This chart pattern indicates sell on rise opportunity amidst rangebound action, Nagaraj Shetti, senior technical research analyst at HDFC Securities said.
He further said having declined sharply from the new higher top of 22,794 levels last Friday, Nifty showing weakness down to a formation of a new higher bottom of the pattern, but still higher bottom reversal is not confirmed.
He feels the short-term trend of Nifty remains negative. "As long as the support of 22,300 holds, there is a possibility of an upside bounce in the market. A move below the support could open more weakness in the short term."
The daily RSI (relative strength index) also indicates weakness and is skewed towards the lower end. Hence, "key levels to watch include immediate support at 22,300 while resistance is placed at 22,550 followed by 22,600. Until the index attains 22,600, it would be better to employ a sell-on-rise strategy," Om Mehra, technical analyst at Samco Securities said.
The broader markets were also under pressure, with the Nifty Midcap 100 index falling half a percent and Smallcap 100 index declining 1.5 percent.
Meanwhile, the volatility increased for the eighth consecutive session, putting the bulls in an uncomfortable position and favouring bears. India VIX, the fear index, jumped 13.56 percent to 16.6, the highest closing level since February 1, 2023, and surged nearly 63 percent in eight days.
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Here are 15 data points we have collated to help you spot profitable trades
Key support and resistance levels on the Nifty and the Bank Nifty
The pivot point calculator indicates that the Nifty 50 is expected to face resistance at the 22,459 level, followed by 22,591 and 22,660 points. On the lower side, the index may take immediate support at the 22,412 level, followed by 22,369 and 22,301 points.
Meanwhile, the Bank Nifty has also seen rangebound trade and ended 28 points lower at 48,895, forming bearish candlestick pattern besides the previous long bear candle on the daily charts, but still holding above all key moving averages.
"Immediate resistance is noted at 49,300, and a decisive breakthrough could trigger short-covering moves towards 49,500. Conversely, a significant breach of the 48,900 mark may induce further selling pressure towards 48,400, where the 20DMA is positioned," Kunal Shah, senior technical & derivative analyst at LKP Securities said.
According to the pivot point calculator, the Bank Nifty index may see resistance at 48,938, followed by 49,267 and 49,446. On the lower side, support is likely at 48,798, followed by 48,688 and 48,509.
Call options data
According to the weekly options data, the 23,000 strike owned the maximum Call open interest, with 91.56 lakh contracts. This level can act as a key resistance for the Nifty in the short term. It was followed by the 22,800 strike, which had 84.47 lakh contracts, while the 22,700 strike had 72.05 lakh contracts.
Meaningful Call writing was seen at the 23,000 strike, which saw an addition of 27.67 lakh contracts. It was followed by 22,600 and 23,100 strikes that added 17.92 lakh and 17.68 lakh contracts.
The maximum Call unwinding was visible in the 23,400 strike, which shed 4.32 lakh contracts, followed by 23,600 and 22,000 strikes, which shed 1.14 lakh and 93,125 contracts, respectively.
Put option data
On the Put side, the maximum open interest remained at 22,000 strike, which can act as a key support level for the Nifty with 62.45 lakh contracts. It was followed by the 22,500 strike, comprising 39.73 lakh contracts and then the 21,800 strike, with 39.15 lakh contracts.
Meaningful Put writing was seen at the 21,700 strike, which saw an addition of 9.31 lakh contracts, followed by 22,400 and 22,300 strikes, with 8.85 lakh and 8.7 lakh contracts additions, respectively.
Put unwinding was observed at the 22,700 strike, which shed 2.26 lakh contracts. This was followed by 21,000 and 21,200 strikes, with a reduction of 82,275 and 41,325 contracts, respectively.
Stocks with high delivery percentage
A high delivery percentage reflects investor interest in a stock. ICICI Lombard General Insurance Company, JK Cement, Larsen & Toubro, Bharti Airtel, and Nestle India saw the highest delivery among the F&O stocks.
28 stocks see long build-up
A long build-up was seen in 28 stocks, including Britannia Industries, Gujarat Gas, Alkem Laboratories, Jubilant Foodworks, and Siemens. An increase in open interest (OI) and price indicates a build-up of long positions.
60 stocks see long unwinding
Based on the OI percentage, 60 stocks saw long unwinding, which included REC, Crompton Greaves Consumer Electricals, BHEL, Dabur India, and Coal India. A decline in OI and price indicates long unwinding.
65 stocks see a short build-up
A short build-up was seen in 65 stocks, including Titan Company, Punjab National Bank, Coforge, Larsen & Toubro, and Bank of Baroda. An increase in OI, along with a fall in price, points to a build-up of short positions.
33 stocks see short-covering
Based on the OI percentage, 33 stocks were on the short-covering list including Godrej Properties, Zydus Lifesciences, Oracle Financial Services Software, Deepak Nitrite, and Havells India. A decrease in OI, along with a price increase, is an indication of short-covering.
Put-Call Ratio
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, dropped further to 0.85 on May 6, from 0.89 levels in the previous session.
The increasing PCR or higher than 0.7 or surpassing 1 means traders are selling more Put options than Calls 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.
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Results on May 7
Dr Reddy's Laboratories, PB Fintech, JSW Energy, Voltas, Delta Corp, Graphite India, Indraprastha Gas, IRB Infrastructure, Jindal Saw, KEC International, Max Financial Services, Navin Fluorine International, Pidilite Industries, Sonata Software, and United Breweries will release quarterly earnings on May 7.
Stocks in the news
Godrej Consumer Products: The FMCG company has posted net loss at Rs 1,893.2 crore for quarter ended March FY24 despite healthy operating numbers, impacted by exceptional loss of Rs 2,375.65 crore for the quarter (against exceptional loss of Rs 22.2 crore in year-ago period). In Q4FY23, it had recorded profit of Rs 452.1 crore. Revenue from operations grew by 5.8 percent on-year to Rs 3,385.6 crore for the quarter.
Novelis Inc: The aluminum solutions provider and subsidiary of Hindalco Industries recorded net income at $166 million for March FY24 quarter, growing 6 percent over a year-ago period and net income excluding special items grew by 2 percent YoY to $179 million. However, net sales declined 7 percent year-on-year to $4.1 billion for the fourth quarter of fiscal year 2024, driven by lower average aluminum prices, partially offset by higher total shipments.
Gujarat Gas: The city gas distribution company has registered 86 percent quarter-on-quarter growth in net profit at Rs 409.5 crore for the quarter ended March FY24, driven by reduction in spot gas prices and increase in volumes. Revenue from operations (excluding excise duty) grew by 5.2 percent sequentially to Rs 4,134.2 crore for the quarter.
Lupin: The global pharma company has recorded consolidated net profit at Rs 359.4 crore for the fourth quarter of financial year 2024, growing 52.3 percent over the corresponding period of previous fiscal. Revenue from operations increased by 12 percent on-year to Rs 4,960.8 crore for the quarter.
Gujarat Fluorochemicals: The chemical company has reported consolidated net profit at Rs 101 crore for March FY24 quarter, falling sharply by 70 percent compared to year-ago period. Revenue from operations for the quarter stood at Rs 1,133 crore, declining 23 percent compared to same period previous fiscal.
Funds Flow (Rs crore)
FII and DII data
Foreign institutional investors (FIIs) net sold Rs 2,168.75 crore shares, while domestic institutional investors (DIIs) pumped in Rs 781.39 crore on May 6, provisional data from the NSE showed.
Stocks under F&O ban on NSE
The NSE has added SAIL to the F&O ban list for May 7, while retaining Aditya Birla Fashion & Retail, Balrampur Chini Mills, Biocon, GMR Airports Infrastructure, and Vodafone Idea to the said list.
Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
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