Nifty 50 Pre- Open Data Analysis August 27

Post-Market Analysis: August 26

The Nifty 50 started the F&O expiry week on a strong note, gaining 0.8% on August 26. The index has maintained its positive momentum for the eighth consecutive session, closing above key resistance levels. This steady rise was supported by momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), both of which maintained a positive bias. The market's bullish sentiment was further confirmed by the formation of a bullish candlestick pattern on the daily chart, along with a higher top-higher bottom formation.

Notably, the Nifty successfully closed the bearish gaps of August 2 and August 5, signaling continued strength. However, some consolidation might be expected before the index moves towards the next resistance levels at 25,100 and 25,400. The immediate support levels are identified at 24,950 and 24,700.

Pre-Open Open Interest (OI) Data Analysis: August 27

The monthly options data indicates that the 26,000 strike holds the maximum open interest with 81.28 lakh contracts, making it a crucial resistance level in the short term. The next significant resistance levels are at the 25,500 and 25,000 strikes, with 78.31 lakh and 69.12 lakh contracts, respectively.

On the Call side, the 26,100 strike saw the maximum Call writing, adding 24.5 lakh contracts. This was followed by the 25,500 and 26,000 strikes, which added 19.03 lakh and 14.62 lakh contracts, respectively. Maximum Call unwinding was observed at the 24,800 strike, shedding 20.88 lakh contracts, suggesting a shift in sentiment.

On the Put side, the 24,000 strike recorded the highest open interest with 91.41 lakh contracts, establishing it as a key support level. The 25,000 and 24,500 strikes also held significant open interest at 86.99 lakh and 74.51 lakh contracts, respectively. The 25,000 strike saw the maximum Put writing, with an addition of 43.03 lakh contracts, signaling strong support around this level.

The Nifty Put-Call Ratio (PCR) rose to 1.31, indicating a bullish sentiment as traders sold more Put options than Call options. This ratio reflects growing confidence among market participants, expecting the index to continue its upward trend.

Resistance and Support Levels

Based on pivot points, the immediate resistance levels for the Nifty 50 are at 25,041, 25,081, and 25,146. On the downside, the immediate support levels are at 24,912, 24,872, and 24,807.

Conclusion and Recommendations

The Nifty 50's current bullish momentum, supported by positive technical indicators and strong options data, suggests that the index may continue its upward trajectory. However, some consolidation may occur before it challenges higher resistance levels at 25,100 and 25,400. Traders are advised to keep an eye on the support levels at 24,950 and 24,700, as a break below these could trigger a short-term correction.

For short-term traders, taking advantage of intraday dips could be a strategy to accumulate positions, with a close watch on the PCR and India VIX to gauge market sentiment. Long-term investors may consider holding onto positions as the overall trend remains positive.

Disclaimer

This report is for informational purposes only and does not constitute investment advice. Trading in financial markets involves substantial risk and may not be suitable for every investor. Past performance is not indicative of future results. Investors should conduct their own research or consult with a financial advisor before making any investment decisions. The information provided is based on data available at the time of writing and is subject to change without notice.

?