Trade Setup for Wednesday: Top 10 things you should know before Opening Bell

Bulls regained control of D-Street on Tuesday after a sharp fall seen in the previous session as Nifty50 reclaimed its crucial resistance level of 9,100.

The Nifty50 made a bullish candle on the daily candlestick charts which signify strength; however, the market could experience some volatility ahead of March expiry on Thursday.

Long-term investors should continue with their positions as long as 9,075 holds. Going forward, it is important for Nifty50 to break past 9,133 on a closing basis to witnessed buying momentum.

The Nifty50 appears to have recouped previous trading session losses, on an intraday basis. It moved in an extremely narrow range of 30 points.

According to Pivot charts, the key support level for Nifty50 is placed at 9,083, followed by 9066, and 9,053. If the index starts to move higher then key resistance levels to watch out are 9,114, followed by 9,127, and 9,144.+

Nifty Bank closed 168 points higher at 21,225. Important Pivot level which will act as crucial support for the index is 21,158, followed by 21,091, and 21,038. On the upside, key resistance level is 21,278, followed by 21,331 and 21,398.

“Nifty Bank formed a Dragon Fly Doji on the daily chart which has a bullish implication if follow-up happens in the next trading session. It had taken support at 20750 in the last week and has been making higher highs – higher lows from last four sessions,” Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told Moneycontrol.com.

“It has immediate support placed near 21,000 while a hold at current levels could take it towards its new high territory of 21,500-21,600 zone,” he said.

On the options front, maximum Call open interest (OI) of 67 lakh contracts stands at strike price 9,200 which will act as a crucial resistance level for the index, followed by 9,100 which now holds 45 lakh contracts in open interest and 9,300 which has accumulated 36 lakh contracts in OI.

There was hardly any Call Writing while Call unwinding was seen at strike prices 9,000 (5.8 lakh contracts were shed), followed by 9,050 (7.3 lakh contracts were shed), 9,100 (10 lakh contracts shed), and 9,200 (2.6 lakh contracts shed).

Maximum Put OI of 50.78 lakh contracts was seen at strike price 9,000 which will now act as a crucial base for the index from 8,800 earlier which has accumulated 50.27 lakh contracts in open interest.

Put writing was seen at strike prices 9,050 (4.8 lakh contracts added), and 9,100 (11.4 lakh contracts added).

“We have seen significant Put writing at strike prices 9,100 which are shifting its support from strike prices 9,020 to 9,075 while intact Call writing may restrict its upside momentum,” said Taparia.

The foreign institutional investors (FIIs) bought shares worth Rs 6,415 crore compared to domestic institutional investors who bought Rs 356 crore in Indian equity market.

High delivery percentage suggests that investors are accepting the delivery of the stock which means that investors are bullish on the stock.

Long Unwinding happens when there is a decrease in OI as well as in price.

An increase in open interest along with a decrease in price mostly indicates short positions being built up.