Market Outlook: 15 Key Factors to Watch Ahead of Expiration Day

Bulls Gather Steam as Nifty 50 Surpasses 24,000 Mark

The Indian equity market rallied on May 25, with the Nifty 50 index surpassing the psychological 24,000 mark, driven by hopes of a US-Iran peace deal-led correction in oil prices. The index gained 1.3 percent on the day, a day ahead of the expiry of monthly derivative contracts due on May 26.

The rally was backed by several positive signals, with the index climbing back above short- and medium-term moving averages and momentum indicators showing bullish crossovers. The bullish bias is expected to remain healthy as long as the index defends the 23,900-23,800 support zone. A breach below this level may trigger selling pressure, however, as long as the support holds, 24,300 will remain the immediate resistance to watch, followed by the 24,600 zone, according to experts.

Key Levels for the Nifty 50

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Nifty Bank Rallies 2.3 Percent

The Nifty Bank index rallied 2.3 percent and outperformed the benchmark Nifty 50. The banking index formed a long bullish candle on the daily timeframe and closed above short- and medium-term moving averages, along with the midline of the Bollinger Bands, signalling a healthy trend. The short-term moving averages have now started sloping upward. The RSI climbed to 54.68 with a bullish crossover, while the MACD turned positive with a green bar on the histogram. All these indicators suggest strengthening momentum and improving bullish sentiment.

Key Levels for the Bank Nifty

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Options Data

The maximum Call open interest for the Nifty 50 was seen at the 24,500 strike (with 1.11 crore contracts), while the maximum Put open interest was seen at the 24,000 strike (with 1.29 crore contracts). The maximum Call writing was observed at the 24,400 strike, while the maximum Put writing was placed at the 24,000 strike.

Funds Flow and Put-Call Ratio

The Nifty Put-Call ratio (PCR) jumped to 1.26 (the highest level since January 2) on May 25, from 1.08 compared to the previous session. The increasing PCR indicates the firming up of a bullish sentiment in the market.

India VIX Declines Sharply

The fear gauge, India VIX, declined sharply by 6.28 percent to the 16.7 level, signalling increased comfort for bulls. However, a decisive fall below the 15 mark is necessary for bulls to gain stronger confidence.

Stocks with High Delivery Trades

Here are the stocks that saw a high share of delivery trades, reflecting investing interest in a stock.

Stocks Under F&O Ban

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit. The stocks retained in F&O ban include SAIL, while stocks added to F&O ban include none. Stocks removed from F&O ban include Kaynes Technology India.