Nifty 50 OI Data Analysis for September -3,2024
Prof.(Dr.) Avanish Tyagi
Option Trader | Option Chain Analyst | Entrepreneur | Academic Professional
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Post Market Review - September 2, 2024
The market maintained its positive trajectory, marking a 13-day streak of gains. On September 2, the Nifty 50 closed at a fresh all-time high of 25,279, up 43 points, fueled by strong momentum indicators. Despite the bullish sentiment, a bearish candlestick pattern emerged on the daily chart as the closing price fell below the opening level. However, the index continued to form higher highs for the sixth consecutive session. Momentum indicators such as the RSI and MACD displayed a positive bias but indicated a negative trend on the hourly charts.
Pre-Open Open Interest (OI) Data - September 3, 2024
The weekly options data revealed that the maximum open interest was concentrated at the 26,000 strike, with 82.35 lakh contracts, establishing this level as a key resistance for the short term. The 25,300 and 25,700 strikes followed, with 63.75 lakh and 60.79 lakh contracts, respectively. Significant Call writing activity was observed at the 25,300 strike, adding 34.53 lakh contracts, while the 25,000 strike saw the highest Call unwinding, shedding 3.26 lakh contracts.
On the Put side, the 25,000 strike held the maximum open interest with 59.99 lakh contracts, acting as a crucial support level for the Nifty. The 24,500 strike showed the most significant Put writing activity, adding 15.8 lakh contracts.
Resistance and Support Levels - September 3, 2024
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Market Mood and Sentiment - September 3, 2024
The Nifty Put-Call Ratio (PCR) dropped to 1.18 on September 2, down from 1.41 in the previous session, indicating a shift in market sentiment. A higher PCR suggests that traders are selling more Put options than Call options, typically signaling a bullish market sentiment. However, the recent drop may indicate a potential shift towards caution.
The India VIX, a measure of market volatility, rose by 4.98% to 14.06, up from 13.39 levels. Despite the increase, the volatility remains below the 15 mark, suggesting a generally favorable environment for bulls.
Conclusion and Recommendation
The Nifty 50's ability to stay above the 25,200 level will be crucial in determining the market's next move. If the index can maintain this level, it could march towards 25,500 amid a period of consolidation. However, the 25,000 level will be vital support to watch. With the ongoing formation of higher highs and the mixed signals from momentum indicators, traders should approach with caution.
Given the current data and market sentiment, it is recommended to stay alert to the resistance and support levels while keeping an eye on the volatility index. A breach of the 25,200 support level could lead to further downside, while sustained momentum above this level could signal further gains.
Disclaimer
This report is for informational purposes only and does not constitute financial advice. Market conditions can change rapidly, and past performance is not indicative of future results. Please consult with a certified financial advisor before making any investment decisions.