NIFTY 05 MAY 2025 - It might attempt to retest 24200 support several times as long as it remains below 24600. 23800 has strong support.
Hello everyone,
My expectation is, Nifty can rise to limited extent and it can see sudden hunting by bears from higher levels. As long as it holds 24200, it will not be easy to short and sit kind of trades.
Price Action & Candlestick Pattern
- Doji Formation: The Nifty 50 formed a Doji candlestick pattern on the daily chart, characterized by a small real body and long upper and lower shadows. This pattern indicates market indecision and a potential pause in the prevailing trend.
Key Support and Resistance Levels
- Immediate Resistance: 24,460
- Next Resistance Zone: 24,800 – 24,850
- Immediate Support: 24,050 (200-Day Simple Moving Average)
- Next Support Level: 23,850
These levels are crucial for traders to watch, as a break above resistance may signal bullish momentum, while a drop below support could indicate bearish sentiment.
Technical Indicators
- Relative Strength Index (RSI): 52.03 – Neutral (With divergence)
- Stochastic Oscillator (9,6): 98.45 – Overbought
- MACD (12,26): 24.22 – Bullish crossover
- Average Directional Index (ADX): 18.40 – Indicates a weak trend
- Williams %R: -1.66 – Overbought
- Commodity Channel Index (CCI): -21.96 – Neutral
- Average True Range (ATR): 101.42 – Suggests high volatility
The overbought readings in the Stochastic Oscillator and Williams %R suggest caution, as the index may be due for a short-term pullback.
Moving Averages
| Period | Simple MA | Indication | Exponential MA | Indication |
|---|---|---|---|---|
| 5-day | 24,329.47 | Buy | 24,343.25 | Buy |
| 10-day | 24,365.97 | Sell | 24,352.72 | Sell |
| 20-day | 24,350.98 | Sell | 24,331.44 | Buy |
| 50-day | 24,269.74 | Buy | 24,175.21 | Buy |
| 100-day | 23,811.74 | Buy | 23,961.23 | Buy |
| 200-day | 23,499.78 | Buy | 23,607.89 | Buy |
Market Outlook
The Nifty 50 is currently in a consolidation phase, with the Doji candlestick pattern signaling indecision among market participants. RSI divergence is not new. From a previous local high of around 23800 to Frida's high of 24589, it is on divergence. Traders should monitor the key support and resistance levels mentioned above. A decisive move beyond these levels could set the tone for the next directional trend.
Any break and sustaining trades below 24200 will indicate a fall towards the 24050 to 24000 levels. On the higher side, 25600 will be a very decisive resistance. Cross over of 24600 will give 24900 to 25000 levels.
Nifty Derivatives Analysis – May 2, 2025 (End-of-Day)
As of May 2, 2025, the Nifty 50 index closed at 24,346.70, reflecting a marginal gain of +12.50 points (+0.05%). Here's a detailed analysis of the derivatives market:
Futures Market Overview
- Nifty May Futures: Closed at 24,380.50, at a premium of 46.3 points over the spot index, indicating a slight bullish sentiment.
- Open Interest (OI): Decreased by 3.09%, suggesting a reduction in open positions.
- Volume: Increased by 130.19%, indicating heightened trading activity.
Put-Call Ratio (PCR)
- PCR (Open Interest): At 1.37, indicating a bearish sentiment, as more puts are open relative to calls.
- PCR (Volume): At 1.09, reinforcing the bearish outlook based on trading volume.
Options Market Insights
- Most Active Call Strike Price: 25,000, with 111,387 contracts traded.
- Most Active Put Strike Price: 24,000, with 101,736 contracts traded.
- Max Traded Call Premium: ₹156 at the 25,000 strike.
- Max Traded Put Premium: ₹363.95 at the 24,500 strike.
Open Interest Analysis
- Call OI: Increased by 3.03%, suggesting a buildup of short positions.
- Put OI: Increased by 1.43%, indicating accumulation of long positions.
Participant Activity
- FIIs: Long positions of approximately 200,000 contracts in calls and 90,000 contracts in puts, indicating a medium bullish stance.
- Proprietary Traders: Long positions of about 100,000 contracts in calls and 35,000 contracts in puts, also reflecting a medium bullish outlook.
- Retail Clients: Short positions of around 300,000 contracts in calls and 170,000 contracts in puts, suggesting a neutral positioning.
Key Takeaways
- Bearish Sentiment: The high PCR values (both OI and volume) indicate a prevailing bearish sentiment in the market.
- FII and Pro Activity: Both FIIs and proprietary traders are maintaining a medium bullish stance, with a balanced approach in their options positions.
- Retail Positioning: Retail clients appear neutral, with significant short positions in both calls and puts.
- Resistance Levels: The 25,000 strike price is a significant resistance level, with the highest call open interest.
- Support Levels: The 24,000 strike price holds substantial put open interest, indicating strong support.
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