Trade setup for February 27: Top 15 things to know before the opening bell

Nifty Trade setup for February 27

• Decisive break below 25,400–25,350 can drive Nifty down toward 25,250-25,000
• Immediate resistance seen at 25,600–25,650 zone
• Necessary for VIX to fall and sustain below 12 zone to further support bullish sentiment

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The benchmark Nifty 50 continued to witness consolidation for another session, closing 14 points higher amid volatility on February 26. The lack of strength, sustained trading below key moving averages, weak signals from momentum indicators, and the consistent testing of support at 25,400 since last week are not good signs for the market. Hence, if the index decisively breaks below the 25,400–25,350 levels, further weakness toward 25,250 and 25,000 cannot be ruled out in the upcoming sessions. However, the immediate resistance is placed in the 25,600–25,650 zone, and only a convincing trade above this range may bring the bulls back, according to experts.

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

1) Key Levels For The Nifty 50 (25,497)

Resistance based on pivot points: 25,556, 25,596, and 25,662

Support based on pivot points: 25,424, 25,384, and 25,318

Special Formation: The Nifty 50 formed a bearish candle with a lower shadow on the daily charts, indicating a lack of strength to sustain higher levels, although buying interest emerged near support zones. The index remained below key moving averages (20-, 50-, and 100-day EMAs) and the midline of the Bollinger Bands. The RSI remained range-bound for a couple of weeks and stayed below the reference line. The MACD sustained below the zero line and the signal line, with further weakness in the histogram. All this indicates continued weakness and a cautious undertone in the market.

2) Key Levels For The Bank Nifty (61,188)

Resistance based on pivot points: 61,275, 61,387, and 61,567

Support based on pivot points: 60,915, 60,804, and 60,624

Resistance based on Fibonacci retracement: 62,077, 64,732

Support based on Fibonacci retracement: 60,825, 60,244

Special Formation: The Bank Nifty formed a doji candlestick pattern on the daily timeframe and remained within Tuesday's range for another session, indicating indecision between bulls and bears. The index consistently defended the 10-day EMA on a closing basis and remained above all key moving averages. The RSI moved upward to 58.43 but stayed below the signal line. The gap between the MACD and the reference line narrowed further, while the Stochastic RSI remained downward and below the signal line. All this indicates a consolidation phase with a slightly positive bias, but with limited momentum.

3) Nifty Call Options Data

According to the weekly options data, the maximum Call open interest was placed at the 26,000 strike (with 1.05 crore contracts). This level can act as a key resistance level for the Nifty in the short term. It was followed by the 25,500 strike (1.02 crore contracts) and 25,700 strike (1 crore contracts).

Maximum Call writing was observed at the 25,500 strike, which saw an addition of 29.28 lakh contracts, followed by the 26,000 and 26,250 strikes, which added 25.05 lakh and 24.02 lakh contracts, respectively. The maximum Call unwinding was seen at the 26,150 strike, which shed 2.62 lakh contracts, followed by the 25,000 and 25,100 strikes, which shed 1.52 lakh and 13,650 contracts, respectively.

4) Nifty Put Options Data

On the Put side, the 25,000 strike holds the maximum Put open interest (with 72.89 lakh contracts), which can act as a key support level for the Nifty in the short term. It was followed by the 25,500 strike (69.14 lakh contracts) and the 25,400 strike (67.02 lakh contracts).

The maximum Put writing was placed at the 25,400 strike, which saw an addition of 18.17 lakh contracts, followed by the 25,000 and 25,200 strikes, which added 15.78 lakh and 13.93 lakh contracts, respectively. The maximum Put unwinding was seen at the 25,600 strike, which shed 6.1 lakh contracts, followed by the 25,700 and 25,650 strikes, which shed 3.11 lakh and 1.47 lakh contracts, respectively.

5) Bank Nifty Call Options Data

According to the monthly options data, the maximum Call open interest was seen at the 61,000 strike, with 13.32 lakh contracts. This can act as a key level for the index in the short term. It was followed by the 62,000 strike (5.85 lakh contracts) and the 63,000 strike (5.3 lakh contracts).

Maximum Call writing was observed at the 62,000 strike (with the addition of 76,830 contracts), followed by the 63,000 strike (31,110 contracts) and 61,100 strike (25,830 contracts). The maximum Call unwinding was seen at the 61,000 strike, which shed 57,090 contracts, followed by the 61,600 and 61,500 strikes, which shed 43,470 and 19,920 contracts, respectively.

6) Bank Nifty Put Options Data

On the Put side, the 61,000 strike holds the maximum Put open interest (with 16.37 lakh contracts), which can act as a key support level for the index. This was followed by the 60,500 strike (4.61 lakh contracts) and the 61,500 strike (3.9 lakh contracts).

The maximum Put writing was placed at the 60,500 strike (which added 77,010 contracts), followed by the 60,700 strike (50,430 contracts) and the 61,200 strike (45,660 contracts). There was hardly any Put unwinding seen in the 60,100-63,000 strike band.

7) Funds Flow (Rs crore)

8) Put-Call Ratio

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, was unchanged at 0.88 on February 26, compared to 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 fear gauge, India VIX, fell for the fourth consecutive session, down 3.15 percent to 13.06, which provided a bit of comfort to bulls. It is necessary for the VIX to fall and sustain below the 12 zone to further support bullish sentiment.

10) Long Build-up (84 Stocks)

A long build-up was seen in 84 stocks. An increase in open interest (OI) and price indicates a build-up of long positions.

11) Long Unwinding (22 Stocks)

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

12) Short Build-up (59 Stocks)

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

13) Short-Covering (45 Stocks)

45 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: Sammaan Capital

Stocks removed from F&O ban: Nil