Trade setup for 16 April: BANK NIFTY closes below 48,000, all eyes on 20-DMA on expiry
Upstox
4 min read • Updated: April 16, 2024, 8:03 AM
Summary
Options data shows significant call OI for today's BANK NIFTY expiry between 48,000 and 48,500 strikes. On the other hand, immediate support for the index lies between 47,150 and 47,350, which is also close to its 20-DMA.
Asian markets update 7 am
After a negative handover from Wall Street, Indian equities are looking at another gap down start, as indicated by the GIFT NIFTY (-0.7%). Other Asian markets are also trading lower. The Nikkei 225 is down 1.8% and Hong Kong's Hang Seng Index is down 1.3%.
U.S. market update
U.S. equities extended their losses on Monday as interest rate sensitive technology stocks sold off. Higher-than-expected retail sales data, which rose to 0.7% in March, pushed the 10-year yield above 4.6% during the session.
The Dow Jones lost 0.6% to close at 37,735, while the S&P 500 slipped 1.2% and ended at 5,061. The tech-heavy Nassaq Composite fell 1.7% to 15,885.
NIFTY50
April Futures: 22,357 (▼1.0%)
Open Interest: 2,32,458 (▲6.7%)
The NIFTY50 extended the bearish sentiment for the second consecutive day, forming a bearish candle on the daily chart. Rising geopolitical tensions between Israel and Iran, coupled with a sharp rise in the Dollar Index, kept Indian equities under pressure throughout the session.
The NIFTY50 has also given up its 20-day moving average and the key swing low of 22,303, indicating a strong presence of bears at higher levels. Going forward, the index's next key support is the 50 DMA, which is located between 22,150 and 22,200. Resistance remains at 22,700.
Open interest build-up for the 18 April expiry highlights significant call options OI at 22,700 and 22,500 strikes. On the other hand, the put base is at 22,000 and 22,200 strikes. Based on the open interest, the traders are expecting NIFTY50 to trade between 21,900 and 22,600.
BANK NIFTY
April Futures: 48,851 (▼1.8%)
Open Interest: 1,23,369 (▼5.3%)
The BANK NIFTY also came under selling pressure and underperformed the NIFTY50. The index closed below the psychologically important 48,000 level on 15 April and saw significant long unwinding in futures contracts.
For today's expiry, we have highlighted the key support and resistance levels on the hourly timeframe. As you can see on the chart below, the red zone (48,250-48,500) will act as an immediate hurdle and the green zone (47,150-47,350) will act as immediate support. A break of this area (up or down) on a closing basis will provide traders with further directional clues.
Options build-up for today’s expiry shows significant call OI at the 48,000 and 48,500 strikes. Conversely, significant put OI was seen at the 47,000 and 47,500 strikes. As per the open interest, traders are expecting BANK NIFTY to trade between 47,200 and 48,500.
FII-DII activity
The Foreign Institutional Investors (FIIs) sold shares worth ₹3,268 crore, while the Domestic Institutional Investors (DIIs) purchased shares worth ₹4,762 crore. To track the ratio of long and short open positions of FIIs in the index, log in to https://pro.upstox.com/ ➡️F&O➡️FII-DII Activity➡️FII Derivatives
Stock scanner
Long build-up: Hindalco, Exide Industries and Aditya Birla Capital
Short build-up: Coforge, Hindustan Uniliver, Bandhan Bank, M&M Financial, Laurus Labs and MCX
Under F&O ban: Balrampur Chini, Bandhan Bank, Exide Industries, Gujarat Narmada Valley Fertilizers (GNFC), Hindustan Copper, India Cements, Metropolis, National Aluminium, Piramal Enterprises, Steel Authority of India and Zee Entertainment
Out of F&O ban: Idea
To access a specially curated smartlist of most traded and active stocks, as well as the OI gainers and losers, simply log in: https://pro.upstox.com/ ➡️F&O➡️Options smartlist/Futures smartlist
In Futures and Options or F&O, long build-up means an increase in Open Interest (OI) along with an increase in price, and short build-up means an increase in Open Interest(OI) along with a decrease in price.
Source: Upstox and NSE.
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