Market Outlook for May 5: Key Events and Indicators to Watch

Nifty 50 Bounces Back with Half Percent Rally

On April 4, the Nifty 50 index experienced a half percent rally, closing above the previous day's high. Despite facing pressure at higher levels, the index's performance indicates a positive bias. This rally was supported by a favorable election outcome in West Bengal and better-than-expected Q4 earnings.

Key Levels for Nifty 50

The Nifty 50's key levels are as follows:

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Technical Analysis

The Nifty 50 has been moving within a high-low range of 23,800-24,300 levels over the past week. The index has sustained above short-term moving averages but failed to hold on to the 50-day EMA and 50 percent Fibonacci retracement. The RSI climbed to 52.18 but remained below the signal line, while the gap between MACD and signal line has narrowed, reflecting a shrinking histogram green bar.

Nifty 50 Options Data

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

The weekly options data shows that the 24,500 strike holds the maximum Call open interest (1.35 crore contracts), which can act as a key resistance level for the Nifty in the short term. The maximum Call writing was observed at the 24,300 strike, which saw an addition of 72.21 lakh contracts.

Nifty 50 Put Options Data

On the Put side, the maximum Put open interest was seen at the 23,500 strike (90.22 lakh contracts), which can act as a key support level for the Nifty in the short term. The maximum Put writing was placed at the 23,500 strike, which saw an addition of 46.02 lakh contracts.

Market Sentiment

The Nifty Put-Call ratio (PCR) fell to 0.80 on May 4, compared to a 0.98 previous session. The increasing PCR indicates a firming up of a bullish sentiment in the market.

India VIX

India VIX has seen a downfall after a day of surge, and has sustained below short and medium-term moving averages, signaling support to bulls. Falling decisively below 17 is necessary for bulls to get further comfort.

Funds Flow

Long and Short Build-up

A long build-up was seen in 94 stocks, indicating a build-up of long positions. 15 stocks saw a decline in open interest along with a fall in price, indicating long unwinding. 60 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions. 41 stocks saw short-covering, meaning a decrease in OI, along with a price increase.

High Delivery Trades

Here are the stocks that saw a high share of delivery trades. A high share of delivery reflects investing (as opposed to trading) 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.