Trade Setup for February 3: Top 15 Things to Know Before the Opening Bell
Trade setup: The Indian stock market witnessed a mild correction on February 1, with the Nifty 50 closing 26 points lower after five consecutive days of gains. Despite this minor dip, the index continued its higher highs-higher lows formation, negating the lower highs-lower tops trend observed earlier. This indicates a positive market outlook as long as the Nifty remains above 23,400.
Market Outlook
- The Nifty sustained above the key resistance zone of 23,400, suggesting a potential move towards 23,600 and 23,700 in the coming sessions.
- Profit booking could bring the index down, with 23,300 acting as a strong support level.
- The Bank Nifty continues to show strength, forming a higher highs pattern, indicating bullish momentum in financial stocks.
- India VIX dropped further, suggesting low market volatility, which is a positive sign for bulls.
- FIIs were net sellers, while DIIs supported the market, maintaining overall buying interest.
Now, let’s dive into the top 15 data points that traders must watch before the stock market opening bell on February 3.
1) Key Levels for Nifty 50 (23,482)
| Resistance Levels | Support Levels |
|---|---|
| 23,598 | 23,358 |
| 23,672 | 23,284 |
| 23,792 | 23,164 |
📌 Technical Analysis:
- The Nifty 50 formed a high wave candlestick pattern, signaling market volatility.
- The index is above 10-day and 20-day EMAs, which supports the bullish trend.
- RSI at 51.5 indicates that the index is holding strong within the upper band.
2) Key Levels for Bank Nifty (49,507)
| Resistance Levels | Support Levels |
|---|---|
| 49,895 | 49,066 |
| 50,151 | 48,811 |
| 50,565 | 48,397 |
📌 Bank Nifty Analysis:
- The Bank Nifty formed a high wave candlestick, indicating volatility but overall strength.
- Higher highs pattern suggests a continuation of the uptrend.
- Above short-term EMAs and midline of Bollinger Bands, confirming positive momentum.
3) Nifty Call Options Data
- 24,000 strike holds the highest Call open interest (1.36 crore contracts), making it a strong resistance level.
- Maximum Call writing was observed at 24,000, 24,500, and 23,800 strikes, indicating supply pressure at these levels.
📉 Call Unwinding:
- 23,200, 23,300, and 23,000 strikes saw unwinding, hinting at a supportive zone.
4) Nifty Put Options Data
- 23,000 strike has the highest Put open interest (82.83 lakh contracts), making it a strong support level.
- Put writing was significant at 23,200, 23,000, and 22,600 strikes, indicating strong bullish sentiment.
📉 Put Unwinding:
- 22,700 strike saw the highest unwinding, suggesting a shift in positioning.
5) Bank Nifty Call Options Data
- 51,000 strike has the highest open interest (8.41 lakh contracts), making it a major resistance level.
- Maximum Call writing at 51,500, 51,000, and 50,000 strikes suggests profit booking at higher levels.
📉 Call Unwinding:
- 48,000 strike witnessed the highest unwinding, reducing selling pressure.
6) Bank Nifty Put Options Data
- 49,000 strike has the highest Put OI (10.87 lakh contracts), making it a strong support level.
- Put writing was highest at 49,000, 50,000, and 49,500 strikes, reinforcing bullish support.
📉 Put Unwinding:
- 49,200, 48,500, and 49,300 strikes saw unwinding, signaling shifts in sentiment.
7) Funds Flow (Rs Crore)
| Category | Inflow | Outflow | Net Flow |
|---|---|---|---|
| FII (Foreign Investors) | 5,420 | 6,110 | -690 |
| DII (Domestic Investors) | 6,320 | 5,210 | +1,110 |
📌 FIIs remain net sellers, while DIIs continue buying, stabilizing the market.
8) Put-Call Ratio (PCR)
- PCR dropped to 0.87, down from 1.01 in the previous session.
- A PCR above 0.7 indicates a bullish bias, while below 0.7 signals a bearish trend.
9) India VIX (Volatility Index)
- India VIX fell by 13.25% to 14.10, indicating low market volatility.
- Lower volatility is favorable for bulls, ensuring market stability.
10) Stock Market Trends
📈 Long Build-up (62 stocks) – Bullish signs as stocks see higher OI and price gains.
📉 Long Unwinding (39 stocks) – Indicates profit booking.
📊 Short Build-up (105 stocks) – Bearish stocks with higher OI and price drop.
📌 Short-Covering (26 stocks) – Stocks with decreasing OI and rising prices.
11) Stocks with High Delivery Volumes
These stocks saw strong investor interest for the long term:
- HDFC Bank
- Reliance Industries
- TCS
- ICICI Bank
12) Stocks Under F&O Ban
- No new stocks added to the F&O ban list.
- No stocks removed from the list.
Market Summary & Trading Strategy for February 3
✅ Nifty outlook remains bullish, with support at 23,400 and a target of 23,700.
✅ Bank Nifty continues strength, eyeing 50,000 with support at 49,000.
✅ Volatility remains low, which is good for bulls.
✅ FIIs selling pressure is absorbed by DIIs, keeping markets stable.
✅ Watch for resistance at 24,000 (Nifty) and 51,000 (Bank Nifty) for potential selling pressure.
Final Takeaway
With key levels intact, low volatility, and bullish trends, the market is expected to remain positive. However, traders should watch out for profit booking at higher levels and monitor resistance zones closely.
For more market insights, follow our blog.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.