Nifty Pre-Open OI Data Analysis and Possible Trading Strategies for February 2, 2024

Market Analysis:

The market is expected to remain rangebound in the upcoming sessions, with key resistance at 21,850 for Nifty 50 and support at 21,500. The recent Interim Budget and FOMC meet outcome had a non-event impact on the market, and the benchmark indices closed moderately lower. The BSE Sensex was down 107 points at 71,645, while the Nifty 50 fell 28 points to 21,697. The technical charts indicate a bearish candlestick pattern with higher high, higher low formation.

According to experts like Ruchit Jain from 5paisa.com, the range of 21,800-21,850 is a crucial resistance zone. A decisive move above this range could signal a resumption of the uptrend, while failure to break this hurdle might lead to consolidation or a corrective phase. Immediate short-term supports are identified at 21,450 and 21,300.

Nagaraj Shetti from HDFC Securities emphasizes that the lower end of the opening downside gap of January 17 around 21,850 is a strong resistance level. A decisive move above 21,850 or below 21,550 could trigger fresh market movement.

?Volatility and Options Data:

?The volatility, as indicated by India VIX, fell considerably, leading to a rangebound session. The Nifty Put Call ratio (PCR) rose to 1.02 on February 1, indicating increased bearish sentiment as Put volumes exceeded Call volumes.

?Pre-Open Market Data Analysis - Feb-2:

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Call Open Interest (OI):

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Maximum Call OI at 21,700 (2.2 Cr), indicating a strong resistance level.

Significant Call writing at 21,700 (1.58 Cr) suggests sellers are active at this level.

Meaningful OI at 22,500 (2.14 Cr) and 21,800 (1.3 Cr) could act as additional resistance levels.

Put Open Interest (OI):

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Maximum Put OI at 21,700 (1.9 Cr), acting as a crucial support level.

Meaningful Put writing at 21,700 (1.5 Cr) indicates strong support at this level.

OI at 21,000 (1.18 Cr) and 21,500 (78.79 L) also provides support.

Maximum Call Unwinding:

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Maximum Call unwinding at 21,600 (14.63 L) indicates a potential decrease in resistance at this level.

Maximum Put Unwinding:

Maximum Put unwinding at 20,700 (12.75 L) suggests a reduction in support at this level.

Entry and Exit Levels:

Entry at Support (Long):

Consider long positions if Nifty holds above 21,500.

Entry confirmation at 21,700 or higher.

Exit Levels (Long):

Consider exiting or booking partial profits if Nifty faces resistance at 21,800-21,850.

Strong exit signal if Nifty drops below 21,500.

Entry at Resistance (Short):

Short positions may be considered if Nifty faces rejection near 21,800-21,850.

Entry confirmation on a break below 21,700.

Exit Levels (Short):

Consider exiting or booking partial profits if Nifty finds support at 21,500.

Strong exit signal if Nifty moves above 21,850.

Resistance and Support Levels:

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Resistance: 21,800-21,850 is a critical resistance zone.

Support: 21,500 is a key support level, followed by 21,300.

Trend Prediction:

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The trend is likely to remain rangebound until there is a decisive move above 21,850 or below 21,550.

Call writing at 21,700 suggests cautious sentiment, and a breakthrough or breakdown at this level could define the trend.

Note: Market conditions can change rapidly. It's essential to monitor real-time data and price action for confirmation before executing any trades.

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Stocks in Focus:

Hero MotoCorp: Recorded strong sales growth in January 2024, with domestic sales rising 20.5% YoY.

Abbott India: Posted a 26% YoY growth in net profit for Q3 FY24, supported by healthy operating numbers.

Eicher Motors: Royal Enfield sales increased 2% YoY in January, though exports declined 20%.

Panacea Biotec: USFDA classified the inspection of its facility in Himachal Pradesh as Official Action Indicated.

Sonata Software: Swung to a net loss due to exceptional losses, but reported a sequential growth in consolidated revenue.

Bata India: Net profit fell 31% YoY for October-December, impacted by weak operating numbers despite a slight increase in revenue.

Disclaimer:

Trading and investing in financial markets carry inherent risks. The information provided is for educational and informational purposes only and does not constitute financial advice. Traders and investors are advised to conduct their own research and seek the advice of a qualified financial professional before making any investment decisions. The author and the platform are not responsible for any losses incurred based on the information provided.