Nifty 50 Weekly Analysis: Key Levels, Trends

Sep 9

As we step into this trading week, the Nifty 50 index presents a mix of both bearish and bullish sentiments, driven by recent market movements and option chain data. Here’s a comprehensive look at the possible scenarios and the trading strategies to consider.

1. Market Overview and Current Sentiment

**1-Hour Chart Analysis:**

Looking at the 1-hour chart, Nifty 50 has seen a recent pullback after touching highs around 25,333.65. The index faced strong resistance at the 25,252.25 level and has since been in a correction phase, breaking below the 25,000 mark. This downward movement suggests bearish sentiment in the short term, especially after breaking the support level at 25,018.60. The key level to watch on the downside is 24,338.60, which has acted as significant support in the past.

**15-Minute Chart Analysis:**
The 15-minute chart further confirms the short-term bearish trend. After a sharp drop below 24,900, there is some consolidation seen around the 24,850-24,880 range. However, any inability to move above the 24,988.75 level may continue to attract selling pressure.

2. Key Levels to Watch for the Week

Resistance Levels:
25,018.60: Immediate resistance level, where a breakout may indicate a reversal.
25,167.35 - 25,252.25:** Strong resistance zone; crossing above this could change the market sentiment to bullish.

- **Support Levels:**

- **24,868.50:** Short-term support; a breakdown below could accelerate selling.
- **24,338.60:** Critical support zone; breaking below this may suggest a deeper correction.

### **3. Option Chain Analysis and Sentiment**
Analyzing the option chain data, we see a higher concentration of Open Interest (OI) in the 25,000-25,200 call strikes, indicating significant resistance and bearish sentiment among the call writers. On the put side, strong support is visible at the 24,500 level with substantial put OI, suggesting that bulls may defend this level.

- **Put-Call Ratio (PCR):** The current PCR is moderately bullish but with cautious optimism. Traders should watch for any changes in OI shifts for directional clues.

### **4. Predicted Market Trend for the Week:**
- **Short-Term Bias:** Bearish, unless Nifty decisively moves above 25,018.60.
- **Long-Term Bias:** Neutral to Bullish, provided key supports hold, especially at 24,338.60.

### **5. Trading Strategies for the Week**
- **Intraday/MIS Trades:**
- **Bullish Strategy:** Buy above 25,018.60 with a target of 25,167.35 and 25,252.25. Stop Loss at 24,900.
- **Bearish Strategy:** Short below 24,850 with a target of 24,750 and 24,600. Stop Loss at 24,988.75.

Carryforward Trades:
- **Bullish Positional Trade:** Enter long positions if Nifty sustains above 25,252.25, with a target of 25,400 and 25,500.
- **Bearish Positional Trade:** Consider shorting if Nifty breaks and sustains below 24,338.60, targeting 24,000.

### **6. Sector Analysis for the Week**

- **Banks:** Showing mixed trends; Bank Nifty could remain volatile, so focus on shorting at resistance levels.
- **IT Sector:** Seems relatively stable, with some signs of consolidation. Consider buying on dips.
- **Auto and FMCG: Showing resilience; long trades are suggested if the market sentiment improves.

Conclusion

This week, Nifty 50 is at a critical juncture with the potential for both upward and downward movements. Keeping an eye on the key levels and adopting a flexible trading strategy will be essential. Stay cautious and watch for early signs of trend changes, especially in the context of global cues and market sentiment.