NIFTY DERIVATIVE ANALYSIS for 21 April 2025

 Hello everyone, 

Open Interest (OI) & Put-Call Ratio (PCR)

• Futures OI: Increased by 14.18%, indicating fresh positions being added.

• Calls: 96.3 million contracts. Call OI: Rose by 5.68%.

• Puts: 110.5 million contracts. Put OI: Surged by 18.78%, suggesting a stronger build-up on the put side

• Put-Call Ratio (PCR): 1.15​. A PCR above 1 indicates a higher accumulation of put options compared to call options, suggesting a bullish sentiment among traders. ​This data suggests a bullish undertone, with significant activity in puts indicating traders are hedging or anticipating potential downside protection. ​

  Key Strike Prices & Open Interest Levels

  • Highest Call OI:

    • 24,000 CE: 53.6 million contracts. Highest call OI, indicating strong resistance

    • 24,500 CE: 36.7 million contracts. 23,500 and 23,800 strikes: Notable call writing, reinforcing resistance zones.​

  • Highest Put OI:

    • 23,000 PE: Significant accumulation. Significant put OI, suggesting strong support.

    • 23,300 PE: Notable interest. 22,500 and 22,000 strikes: Additional support levels based on put writing.​

    These levels indicate strong resistance around 24,000 and solid support near 23,000. ​These levels are critical for traders to watch, as they often act as psychological barriers and can influence market direction. ​

  • Futures Pricing

    • Nifty April Futures: Closed at 23,848.90, slightly below the spot price of 23,851.65, indicating a minor discount. ​This small discount suggests a neutral to mildly bearish short-term outlook among futures traders.

    • Interpretation & Strategy

      • Market Sentiment: The elevated PCR and substantial put OI at lower strikes reflect a cautiously bullish stance among market participants.​

      • Resistance Levels: The accumulation of call OI at 24,000 and 24,500 suggests potential resistance zones.​

      • Support Levels: Strong put OI at 23,000 and 23,300 indicates robust support levels.​

      • Trading Strategy:

        • Range-Bound Approach: Consider strategies like Iron Condors or Butterflies between 23,000 and 24,000 to capitalize on the expected consolidation.

        • Breakout Strategy: If Nifty breaks above 24,000 with volume, bullish strategies like Bull Call Spreads could be effective.

        • Breakdown Strategy: A fall below 23,000 may warrant bearish strategies such as Bear Put Spreads.​
        • The derivatives data indicates a cautiously bullish sentiment:​
        • Bullish Indicators:
        • Increase in futures and put OI.
        • Rising PCR.​
        • Cautionary Notes:
        • Significant resistance at 23,500 and 24,000 levels. Potential for consolidation or pullback if these resistances hold.
        • • Trading Strategy Suggestions:

          • For Bullish Traders:

          • Consider bullish strategies like bull call spreads, especially if Nifty sustains above 23,500.​

          • For Cautious Traders:

          • Wait for a clear breakout above 24,000 before entering aggressive long positions.​

          • For Bearish Traders:

        • Monitor for signs of reversal near resistance levels to consider short positions, with tight stop-losses.​