Nifty 50 analysis and further strategy

The Nifty 50 index showed mild strength amid rangebound trading on December 27 and closed with a gain of 0.30%. However, it remained in a wide trading range between the 200-day SMA (23,862) and 200-day EMA (23,694) for the fourth consecutive session. Experts believe that rangebound movement may continue in the upcoming sessions due to low trading volumes. Cooling India VIX may support bulls in the market.

If Nifty decisively crosses the 200-day SMA and sustains above it, a rally to 24,000-24,200 is possible. Conversely, if it falls below the 200-day EMA, it could fall to 23,500 (December 20 low).

Key levels for Nifty

• Pivot Point Support: 23,690, 23,647, 23,578
• Pivot Point Resistance: 23,904, 23,936, 23,989

Nifty has formed a small bullish candle on the daily chart with a long upper shadow indicating weakness at higher levels. Overall, the market sentiment remains bearish as the index is below the 10, 20, 50 and 100-day EMAs and trading within the lower band of the Bollinger Bands.

• RSI: 40.7
• MACD: below zero line
• KST: negative crossover

Key levels for Bank Nifty

• Pivot Point Resistance: 51,542, 51,633, 51,782
• Pivot Point Support: 51,245, 51,153, 51,005
• Fibonacci Resistance: 51,578, 52,128
• Fibonacci Support: 50,666, 49,787

Bank Nifty also formed a long upper wick and small green candle similar to Nifty, indicating selling pressure at upper levels. The index failed to consistently close above the 100-day EMA, indicating strong resistance.

Analysis of options data

Nifty Call Option:

• 24,500 on strike 67.85 lakh The contract’s maximum call open interest, which represents an important resistance level.

Nifty Put Option:

• 23,500 on strike 65.72 lakh The maximum put open interest of the contract, which provides a strong support level.

Bank Nifty Call Option:

• 52,000 on strike 11.32 lakh The contract’s maximum call open interest, which indicates resistance.

Bank Nifty Put Option:

• 51,500 on strike 8.86 lakh The maximum Put Open Interest of the contract will act as a key support in the coming sessions.