By Vineet Kumar 
Trade Setup for Thursday: 15 Key Insights to Watch Before the Opening Bell
The Nifty 50 and Bank Nifty indices have been navigating a tricky path this week, with significant levels and patterns emerging that traders must keep an eye on. Here’s a detailed breakdown of what’s happening and what to watch out for.
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1) Nifty 50: Key Resistance and Support Levels
The Nifty 50 continues to struggle below its 200-day EMA, which stands at 23,540. Despite a 0.3% recovery after seven consecutive losing sessions, the index failed to break this critical level for the third straight day.
Resistance Levels: 23,709, 23,783, and 23,904
Support Levels: 23,467, 23,393, and 23,272
2) Gravestone Doji Signals Caution
The Nifty formed a Gravestone Doji on the daily charts, a bearish pattern characterized by a long upper shadow and little or no lower shadow. This suggests sellers pushed back hard after the bulls briefly took control during the session.
For example, imagine a tug-of-war where one team (the bulls) pushes forward early, only to be overwhelmed by the opposition (the bears) before the match ends. This tug-of-war is visible in the index dropping 262 points from its intraday high of 23,800.
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3) Momentum Indicators: RSI and MACD Stay Negative
The RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) remain in bearish territory, indicating limited buying momentum. The index is also hovering near the lower Bollinger Band, a sign of downward pressure.
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4) Bank Nifty: Holding Above the 200-Day EMA
Unlike the Nifty, the Bank Nifty showed resilience by staying above its 200-day EMA (49,900) for the fourth consecutive session.
Resistance Levels: 50,891, 51,019, and 51,226
Support Levels: 50,476, 50,348, and 50,141
Interestingly, the index has been forming a higher high-higher low pattern but still failed to sustain above the 10-day EMA (50,950).
Special Formation: The Bank Nifty has remained range-bound between 51,350 and 49,900, reflecting indecision. Tuesday’s Doji-like candlestick further underscores this uncertainty.
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5) Options Data: Where Traders Are Betting
Nifty Call Options
Key Resistance: Maximum open interest is at 24,000 (99.94 lakh contracts), followed by 23,800 and 24,500.
Action Points: Heavy Call writing at 24,300 suggests strong resistance, while unwinding at 23,500 indicates reduced selling pressure there.
Nifty Put Options
Key Support: Maximum open interest is at 23,000 (62.71 lakh contracts), followed by 23,500 and 23,400.
Action Points: Significant Put writing at 23,700 hints at near-term support.
Bank Nifty Call Options
Key Resistance: 52,000 strike (20.42 lakh contracts), followed by 51,000 and 52,500.
Bank Nifty Put Options
Key Support: 49,500 strike (19 lakh contracts), followed by 49,000.
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6) The Put-Call Ratio (PCR): Market Sentiment Turns Bearish
The Nifty PCR slipped to 0.83 from 0.85, signaling bearish sentiment as traders leaned toward selling Calls over Puts.
Think of PCR like a traffic signal for the market mood:
A ratio below 0.7 often flashes a red light for bulls (bearish).
A ratio above 1 suggests bullish optimism.
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7) India VIX: Volatility on the Rise
India VIX, the market’s fear gauge, climbed 3.26% to 15.66, adding more pressure on bulls. Higher VIX levels are like turbulence on a flight—traders should buckle up and prepare for sharp swings.
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8) Weekly Expiry and Trading Strategy
With the weekly expiry looming, it’s crucial to watch how Nifty handles the 23,800 hurdle and whether Bank Nifty sustains its range. If Nifty breaks below 23,200, it could test deeper supports near 23,000, while Bank Nifty’s range could provide intraday opportunities.
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Conclusion
The market is at a critical juncture, and traders should be cautious. While Bank Nifty offers some signs of stability, Nifty’s inability to cross its 200-day EMA and the emergence of bearish patterns demand vigilance.
Keep your strategies flexible, and consider both short-term range trading and directional plays if key levels break.
