Nifty 50 Pre-Open OI Data Analysis - February 28, 2025

Post-Market Analysis - February 27, 2025

The Nifty 50 continued its rangebound movement during the monthly F&O expiry session, closing flat-to-negative. The index traded between 22,500 and 22,700 for the third consecutive session after a gap-down opening on February 24. Despite the ongoing consolidation, the falling India VIX provided confidence to bulls. The volatility index closed at 13.31, its lowest since December 27, 2024, signaling reduced market fear.

From a technical perspective, the Nifty formed a high wave-like candlestick pattern, following an Inverted Hammer formation in the prior session. The Relative Strength Index (RSI) remained below 30 (at 29.57) for the third straight session, indicating an oversold zone and the potential for a rebound. However, all key exponential moving averages (10, 20, 50, 100, and 200-day EMAs) pointed southward, reinforcing a bearish trend.

Technical Setup at the End of the Day

Resistance Levels (Pivot Points): 22,596, 22,620, 22,661

Support Levels (Pivot Points): 22,516, 22,491, 22,451

The Nifty 50 remains in a consolidation phase, with critical resistance at 22,700. A breakout above this level could propel the index toward 23,000, while a breach below 22,500 may push it towards the 22,400-22,350 zone.

Market Sentiment

The Put-Call Ratio (PCR) jumped to 0.98 on February 27 from 0.77 in the previous session, indicating a rise in Put writing and a possible bullish sentiment in the market.

• A PCR above 0.7 suggests traders are selling more Put options, indicating strengthening bullish sentiment.
• A drop below 0.7 or toward 0.5 would signal higher Call selling and a bearish mood.

The India VIX’s continued decline reflects reduced volatility, supporting the bulls. However, the index’s movement remains dependent on breaking the immediate resistance at 22,700.

Pre-Open OI Analysis - February 28, 2025

Call Side Data:

• Maximum Call OI: 23,000 strike (51.87 lakh contracts) - Key Resistance
• Other high Call OI strikes: 22,600 (46.82 lakh contracts) and 23,500 (39.79 lakh contracts)
• Maximum Call Writing: 22,600 strike (32.94 lakh contracts), followed by 22,500 and 23,500 strikes

Put Side Data:

• Maximum Put OI: 22,500 strike (50.41 lakh contracts) - Key Support
• Other high Put OI strikes: 22,600 (39.25 lakh contracts) and 21,500 (36.67 lakh contracts)
• Maximum Put Writing: 22,500 strike (27.49 lakh contracts), followed by 22,600 and 21,500 strikes

Market Spread

The market remains in a narrow range between 22,500 and 22,700, suggesting a consolidation phase. The highest OI concentration on the Call side at 23,000 and the Put side at 22,500 establishes a clear resistance-support range. Any decisive move beyond these levels will dictate the market’s short-term direction.

Conclusion and Recommendations

1. Bullish Scenario: A breakout above 22,700 could trigger an upside move toward 23,000. Traders can look for long opportunities if the index sustains above this level.
2. Bearish Scenario: A breakdown below 22,500 may lead to further downside, with support emerging at 22,400-22,350. Traders should be cautious of a possible downward move.
3. Neutral/Rangebound Scenario: As long as the Nifty remains between 22,500 and 22,700, consolidation is expected, and range-bound trading strategies such as selling strangles or iron condors could be effective.
4. Volatility Consideration: With the India VIX at a two-month low, market moves could remain stable. However, any sudden rise in volatility should be monitored closely.

Disclaimer

The above analysis is for informational purposes only and should not be construed as financial or investment advice. Traders and investors should conduct their own research and consult with financial advisors before making any trading decisions. Market conditions are subject to change, and past performance is not indicative of future results.

Prepared by: Dr. A.K. Tyagi Nifty Option Trading Academy

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