Trade setup for 15 April: NIFTY 50 and BANK NIFTY plunge on global sell-off, key support levels to watch
Upstox
4 min read • Updated: April 15, 2024, 8:13 AM
Summary
The BANK NIFTY continues to hold a positive structure, and is still trading above all of its key DMAs (20 and 50). The index has found crucial support around 48,000-mark. However, a close below 48,000 would indicate further weakness.
Asian markets update 7 am
Indian equities are set for a negative start as traders weigh the impact of Iran’s drone strike on Israel’s military targets over the weekend. The GIFT NIFTY is down 0.5%, suggesting an opening around 22,400-mark. Other Asian markets are also trading lower. Japan's Nikkei 225 is down 1% and Hong Kong's Hang Seng Index also lost 1%. .
U.S. market update
U.S. stocks tumbled on Friday as concerns over a potential conflict between Israel and Iran flared. Investor sentiment was further dampened by JPMorgan Chase's earnings report, which met revenue and profit expectations but disappointed with a lower-than-expected net interest margin.
The Dow Jones tumbled 1.2% and ended the day at 37,983, while the S&P 500 dropped 1.4% and closed at 5,123. The Nasdaq Composite fell 1.6% and closed at 16,175.
NIFTY50
April Futures: 22,601 (▼0.9%)
Open Interest: 2,17,724 (▼4.7%)
The NIFTY50 index experienced a sharp sell-off on Friday, closing below its previous three-day low. Amid higher-than-expected inflation data in the U.S. and the latest geopolitical tensions between Iran and Israel, the cash market witnessed the biggest one-day sell-off by FPIs since December 2023.
On the daily chart, the NIFTY50 formed a bearish engulfing candle and closed below its previous all-time high of 22,525 made on the 7 March. Experts believe that the next important support for the index is between its 20 and 50 day moving averages (DMAs), which are placed in the 22,270-22,150 area. This area will act as immediate support for the index, while resistance remains at 22,800.
The initial open interest (OI) for the April 18 expiry shows significant call OI at the 22,700 and 23,000 strikes. On the other hand, put option OI base is at 22,200 and 22,000 strikes. Based on the initial open interest, traders are expecting NIFTY50 to trade between 22,100 and 22,900.
BANK NIFTY
April Futures: 48,714 (▼0.6%)
Open Interest: 1,30,296 (▼8.4%)
The BANK NIFTY also came under selling pressure, giving up all of its strong weekly gains on Friday. After closing above its all-time high (48,636) on 10 April, the index gave up the key level on Friday, indicating selling pressure at higher levels.
The daily chart of the BANK NIFTY continues to hold a higher-high-lower structure, and is still trading above all of its key DMAs (20 and 50). As you can see in the chart below, the index has found crucial support in the highlighted green area, which is around the 48,000 level. However, a close below 48,000 would indicate further weakness.
Options build-up for the 16 April expiry shows significant call OI at the 49,000 and 49,500 strikes. Conversely, significant put OI was seen at the 48,000 and 48,500 strikes. As per the open interest, traders are expecting BANK NIFTY to trade between 47,500 and 49,500.
FII-DII activity
The Foreign Institutional Investors (FIIs) sold shares worth ₹8,027 crore, the highest single day selling figure in the past four months. On the other hand, the Domestic Institutional Investors (DIIs) provided cushion and purchased shares worth ₹6,341 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: Aarti Industries, IRCTC and Metropolis
Short build-up: Page Industries, Sun Pharma, Laurus Labs, Power Grid and Maruti Suzuki
Under F&O ban: Balrampur Chini, Gujarat Narmada Vly Frtlzrs (GNFC), Hindustan Copper, Idea, India Cements, Metropolis, National Aluminium, Piramal Enterprises, and Zee Entertainment
Out of F&O ban: Exide Industries and Steel Authority of India
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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