Trade setup for February 21: Top 15 things to know before the opening bell

Nifty Trade Setup

The Nifty 50 continued to consolidate for the fourth consecutive session after hitting a new low of 2025, falling by 20 points on February 20. The index consistently defended 22,800 on a closing basis, and on the higher side, it faced resistance at 23,000. Considering the formation of a bullish candlestick with no upper or lower wicks, the bulls seem to be in a better position. If they manage to strengthen further, the immediate target is expected to be 23,000, and above that, 23,200 (near the 20-day EMA or the 61.8% Fibonacci retracement from the June 2024 low to the September high) cannot be ruled out. However, sustaining below 23,000 will continue the consolidation, with key support at the 22,700 level, according to experts.

Here are 15 data points we have collated to help you spot profitable trades:

1) Key Levels For The Nifty 50 (22,913)

Resistance based on pivot points: 22,926, 22,952, and 22,994

Support based on pivot points: 22,841, 22,815, and 22,772

Special Formation: The Nifty 50 reported a bullish candlestick pattern on the daily charts, followed by a strong recovery from the day's low, signaling strength from the bulls. However, overall, the bears still maintain tight control over the market, as the index traded below all key moving averages, with a continuation of the negative bias in the momentum indicators.

2) Key Levels For The Bank Nifty (49,335)

Resistance based on pivot points: 49,430, 49,502, and 49,619

Support based on pivot points: 49,197, 49,125, and 49,009

Resistance based on Fibonacci retracement: 50,366, 51,158

Support based on Fibonacci retracement: 47,866, 46,078

Special Formation: The Bank Nifty was rangebound after the previous day's long bullish candle, declining by 0.5 percent and forming a Doji-like candlestick pattern on the daily timeframe, indicating indecision between bulls and bears. The index could not sustain above the short-term moving averages (10 and 20-day EMA) or the midline of the Bollinger Bands, but the near-term trend still seems to be positive as long as the index holds above the low of February 19 (48,800).

3) Nifty Call Options Data

According to the monthly options data, the 23,500 strike holds the maximum Call open interest (with 92.59 lakh contracts). This level can act as a key resistance for the Nifty in the short term. It was followed by the 24,000 strike (92.41 lakh contracts) and the 23,000 strike (74.05 lakh contracts).

Maximum Call writing was observed at the 23,500 strike, which saw an addition of 24.83 lakh contracts, followed by the 23,000 and 24,000 strikes, which added 18.59 lakh and 16.58 lakh contracts, respectively. The maximum Call unwinding was seen at the 23,850 strike, which shed 1.07 lakh contracts, followed by the 23,750 and 22,000 strikes, which shed 51,675 and 28,875 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the maximum Put open interest was seen at the 22,000 strike (with 87.6 lakh contracts), which can act as a key support level for the Nifty. It was followed by the 23,000 strike (62.59 lakh contracts) and the 22,500 strike (55.01 lakh contracts).

The maximum Put writing was placed at the 22,300 strike, which saw an addition of 34.33 lakh contracts, followed by the 22,000 and 22,200 strikes, which added 28.56 lakh and 12.94 lakh contracts, respectively. The maximum Put unwinding was seen at the 23,500 strike, which shed 36,450 contracts, followed by the 23,900 and 23,150 strikes, which shed 27,600 and 24,450 contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 51,000 strike, with 22.46 lakh contracts. This can act as a key resistance level for the index in the short term. It was followed by the 50,000 strike (15.12 lakh contracts) and the 51,500 strike (13.4 lakh contracts).

Maximum Call writing was visible at the 50,700 strike (with the addition of 5.82 lakh contracts), followed by the 49,500 strike (3.36 lakh contracts) and the 50,000 strike (3 lakh contracts). The maximum Call unwinding was seen at the 49,000 strike, which shed 39,810 contracts, followed by the 48,500 and 48,000 strikes, which shed 9,150 and 7,920 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 49,000 strike holds the maximum Put open interest (with 14.83 lakh contracts), which can act as a key support level for the index. This was followed by the 48,500 strike (14.35 lakh contracts) and the 48,000 strike (14.12 lakh contracts).

The maximum Put writing was observed at the 48,500 strike (which added 4.11 lakh contracts), followed by the 47,500 strike (2.29 lakh contracts) and the 49,500 strike (1.4 lakh contracts). The maximum Put unwinding was seen at the 49,000 strike, which shed 70,140 contracts, followed by the 47,300 and 49,600 strikes which shed 44,340 and 41,070 contracts, respectively.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, rose to 0.9 on February 20, against 0.80 in the previous session.

The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.

9) India VIX

The volatility index, India VIX, which measures expected market volatility, extended its downtrend for the third consecutive session, falling sharply by 4.78 percent to 14.68. This is favourable for the bulls. If the VIX drops further, the bulls may enter a more comfortable zone.

10) Long Build-up (80 Stocks)

A long build-up was seen in 80 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (14 Stocks)

14 stocks saw a decline in open interest (OI) along with a fall in price, indicating long unwinding.

12) Short Build-up (46 Stocks)

46 stocks saw an increase in OI along with a fall in price, indicating a build-up of short positions.

13) Short-Covering (92 Stocks)

92 stocks saw short-covering, meaning a decrease in OI, along with a price increase.

14) 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.

15) 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.

Stocks added to F&O ban: Nil

Stocks retained in F&O ban: Manappuram Finance

Stocks removed from F&O ban: Nil