Market Analysis and Insights: July 1 and Pre-Open Data for July 2

Post-Market Analysis: July 1

The market started the week on a positive note on July 1, with a favorable breadth for the bulls. The Nifty 50 index rallied 131 points, closing at a new all-time high of 24,142 after a day of small profit-taking. This positive momentum was supported by strong buying across sectors. Analysts are optimistic about the Nifty's performance in the coming sessions, expecting the index to target 24,200, followed by 24,500, as long as it maintains 24,000 as immediate support and 23,800 as crucial support.

Pre-Open Market Data: July 2

The "Pre-Open Market Data July-2" provides detailed insights into call and put option activities for various strike prices, offering a glimpse into market sentiment and trader positioning.

Call Options Analysis

For call options, the highest open interest (OI) is observed at the 25,000 strike price with 4,79,097 contracts. This is followed by the 24,500 and 24,700 strike prices, with 2,72,315 and 2,09,297 contracts, respectively. The maximum OI writing for call options is also at the 25,000 strike price, involving 71,142 contracts. Additional significant call option activities include writing at the 24,700 and 24,500 strike prices, with 62,165 and 50,479 contracts, respectively. However, maximum call unwinding is evident at the 24,900 strike price, with a reduction of 41,267 contracts. The 24,000 and 25,300 strike prices also show notable call unwinding and writing activities with 21,539 and 25,300 contracts, respectively.

Put Options Analysis

In contrast, the put options data indicates the highest OI at the 24,000 strike price, with 3,07,691 contracts. This is followed by the 23,000 and 23,500 strike prices, with 2,60,344 and 2,45,076 contracts, respectively. The maximum OI writing for put options is seen at the 24,000 strike price, involving 87,775 contracts. Other notable activities include writing at the 24,100 and 23,300 strike prices, with 76,983 and 60,683 contracts, respectively. Additionally, the maximum put unwinding occurs at the 22,500 strike price with a reduction of 48,027 contracts, while the 22,700 and 22,000 strike prices show reductions of 16,918 and 12,400 contracts, respectively.

Market Sentiment and Indicators

The Nifty Put-Call ratio (PCR), which indicates market sentiment, rose to 1.21 on July 1 from 1.17 levels in the previous session. An increasing PCR above 1 suggests that traders are selling more put options than call options, generally indicating a bullish sentiment in the market. Conversely, a ratio below 0.7 or moving towards 0.5 would indicate higher selling in calls than puts, reflecting a bearish mood.

Volatility remained below the 14 mark for another session, maintaining a favorable trend for bulls. The India VIX, the fear gauge, rose slightly by 0.2 percent to 13.83 from 13.8 levels, indicating a relatively calm market environment.

Conclusion and Recommendations

The current market setup, with strong support levels and bullish sentiment indicated by the PCR and low volatility, suggests a continued positive outlook for the Nifty 50. As long as the index holds above the 24,000 support level, it is likely to test and potentially break through the 24,200 and 24,500 resistance levels in the near term.

Recommendations:

• For Traders: Consider maintaining a bullish stance while closely monitoring the 24,000 and 23,800 support levels. Utilize options strategies such as bull call spreads or put credit spreads to capitalize on the bullish sentiment.
• For Investors: Look for opportunities to accumulate quality stocks on any dips, focusing on sectors that have shown strength in the recent rally.

Disclaimer: This analysis is based on historical data and market indicators, and it is important to consider the inherent risks in trading and investing. It is recommended to consult with a financial advisor before making any investment decisions. The market can be unpredictable, and past performance is not indicative of future results.