The market is expected to remain rangebound as long as it trades below 22,200 as closing decisively above the same can raise some hope for another leg of northward journey in the Nifty 50 in coming sessions, experts said. On the lower side, the 21,950 level (which coincides with 21-day EMA -exponential moving average) is expected to act as an immediate support for the index, followed by 21,850 which coincides with upward sloping support trendline, they added. The index defended both these supports on closing basis, which is a positive sign.
On February 29, the benchmark indices remained volatile and gained strength in late trade. The BSE Sensex climbed 195 points to 72,500, while the Nifty 50 was down 32 points to close at 21,983 on the expiry day for February futures & options contracts.
The index has formed bullish candlestick pattern with upper and lower shadows, which resembles High Wave kind of pattern on the daily charts, indicating volatility.
"On the daily chart, the index concluded just above the 21-day exponential moving average (21EMA). At the lower end, crucial support is positioned at 21,950; as long as the index maintains a position above 21,950, there is a possibility of witnessing a recovery. Nevertheless, a decline below 21950 could potentially lead the index towards 21,800," said Rupak De, senior technical analyst at LKP Securities.
Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas, feels the index is still not out of the woods and it is likely to witness volatile action going ahead. "22,230 – 22,250 will act as an immediate hurdle zone from short term perspective."
The broader markets outperformed benchmark indices as the Nifty Midcap 100 and Smallcap 100 indices gained 0.5 percent and 0.6 percent, respectively.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance levels on Nifty
The pivot point calculator indicates that the Nifty is likely to take immediate support at 21,892 followed by 21,844 and 21,768 levels, while on the higher side, it may see immediate resistance at 22,044 followed by 22,092 and 22,168 levels.
On February 29, the Bank Nifty bounced back and climbed above 46,000 mark, forming bullish candlestick with upper and lower shadows on the daily timeframe, suggesting a volatile session. The index rose 158 points to 46,121.
"Bank Nifty has held on to the support zone of 45,800 – 45,600 and witnessed a recovery. Until 45,660 (Thursday's low) is not breached we expect the pullback to continue till 46,750 – 46,900," Gedia said.
As per the pivot point calculator, the Bank Nifty is expected to take support at 45,782 followed by 45,625 and 45,370 levels, while on the higher side, the index may see resistance at 46,293 followed by 46,450 and 46,705 levels.
The options data indicated that psychological 22,000 mark is expected to be crucial for the direction in the Nifty 50 in the coming sessions.
As per the monthly options data, the 22,000 strike owned the maximum Call open interest with 1.6 crore contracts, which can act as a key level for the Nifty in the short term. It was followed by the 22,100 strike, which had 1 crore contracts, while the 22,500 strike had 87.84 lakh contracts.
Meaningful Call writing was seen at the 22,000 strike, which added 57.93 lakh contracts followed by 21,900 strike adding 3.99 lakh contracts.
The maximum Call unwinding was at the 22,200 strike, which shed 69.59 lakh contracts followed by the 23,000 and 22,500 strikes, which shed 66.46 lakh contracts and 51.91 lakh contracts.
On the Put side, the maximum open interest was visible at 22,000 strike, which can act as a key level for Nifty, with 99.46 lakh contracts. It was followed by the 21,900 strike comprising 78.96 lakh contracts and then the 21,500 strike with 70.73 lakh contracts.
Meaningful Put writing was at 22,000 strike, which added 46.49 lakh contracts followed by the 21,900 strike and 21,400 strike, which added 36.44 lakh contracts and 7.41 lakh contracts, respectively.
Put unwinding was seen at the 21,500 strike, which shed 23.35 lakh contracts followed by the 22,100 strike shedding 14.15 lakh contracts, and then the 21,000 strike, which shed 13.41 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. SBI Life Insurance Company, ICICI Lombard General Insurance Company, Cipla, Piramal Enterprises, and Kotak Mahindra Bank saw the highest delivery among the F&O stocks.
Here are the top 10 stocks which saw the highest rollovers on expiry day including Shriram Finance, Max Financial Services, Voltas, Infosys, and Abbott India with 98-99 percent rollovers.
A long build-up was seen in 21 stocks, which included Berger Paints, Hindustan Copper, Petronet LNG, Axis Bank, and Kotak Mahindra Bank. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 27 stocks saw long unwinding including GMR Airports Infrastructure, ICICI Lombard General Insurance Company, BPCL, Page Industries, and Tata Motors. A decline in OI and price indicates long unwinding.
A short build-up was seen in 7 stocks including Apollo Hospitals Enterprises, Zee Entertainment Enterprises, Voltas, Eicher Motors, and MRF. An increase in OI along with a fall in price points to a build-up of short positions.
130 stocks see a short covering
Based on the OI percentage, 130 stocks were on the short-covering list. This included Sun Pharmaceutical Industries, Samvardhana Motherson International, Alkem Laboratories, Zydus Lifesciences, and Bata India. A decrease in OI along with a price increase is an indication of short-covering.
The Nifty Put Call ratio (PCR), which indicates the mood of the equity market, jumped sharply to 1.09 on February 29 against 0.66 levels in the previous session. The PCR above 1.00 indicates that the trading volume of Put options is more than Call options, which generally indicates the likely bearish trend in the market ahead.
For more bulk deals, click here
Stocks in the news
ICICI Bank: The private sector lender purchased an additional 25,14,365 equity shares of ICICI Lombard General Insurance for around Rs 431 crore. Consequently, ICICI Lombard has become a subsidiary of the bank.
Aurobindo Pharma: The United States Food and Drug Administration (US FDA) inspected the injectable facility of Eugia SEZ, a step-down subsidiary of the pharma company at Mahaboobnagar, Telangana, during February 19-29. The health regulator closed inspection with 7 observations which are procedural in nature.
Biocon: The US Food and Drug Administration (FDA) conducted an inspection at Biocon Biologics' Biocon Campus (site 1) facility during February 20-28. After the inspection, the US FDA issued Form 483s with 4 observations.
Vedanta: The Supreme Court dismissed Vedanta's plea seeking reopening of its Sterlite Copper smelter plant in Tamil Nadu for judgment.
Chalet Hotels: The hotel chain said it has received approval from the Board of Directors for acquisition of partners’ share in Ayushi and Poonam Estates LLP for Rs 315 crore.
Suven Pharmaceuticals: Suven Pharmaceuticals and Cohance Lifesciences announced the scheme of amalgamation for the merger of Cohance with Suven. Cohance is a leading CDMO (contract development and manufacturing organization) and merchant API platform.
Funds Flow (Rs crore)
Foreign institutional investors (FIIs) net bought shares worth Rs 3,568.11 crore, while domestic institutional investors (DIIs) sold Rs 230.21 crore worth of stocks on February 29, provisional data from the NSE showed.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
