Trade setup for 22 Feb: Nifty50 closes near the day's low, bears strengthening base at 17,900?

Asian Markets Update @ 7 am 

The SGX Nifty is trading 61 (-0.3%) points lower than its last close, indicating a negative start for the Nifty50 today. Major Asian markets are trading in the red. Japan's Nikkei 225 fell 1.3%, while Hong Kong's Hang Seng Index declined 0.1%.

Global Market Update

US stocks fell sharply on Tuesday as growing fears of further interest rate hikes pushed Treasury yields higher and technology and retail stocks slumped. The Dow Jones and S&P 500 slipped 2%, while the technology-heavy Nasdaq Composite lost 2.5%.

Index Action

Nifty50
February Futures: 17,851  📉▼11 (-0.07%)     
OI Contracts: 1,39,014 (-17%)   

The Nifty50 closed marginally lower, marking the third consecutive day of negative closing. The index opened above 17,900 but failed to hold the opening gains. With IT and financials weighing on the index, it slipped to exactly 17,800 mark and bounced off the key support level.

The Nifty 50 options contracts expiring on 23 February have significant positions at the 18,000 and 18,100 calls and the 17,500 and 17,800 puts.

As per options data and OI analysis, the Nifty50’s broad range for the 29th March expiry is between 17,300 and 18,400. On the other hand, 17,700 and 18,000 is the short-term range for the current week.

Bank Nifty
February Futures:  40,737 📉▼58 (-0.1%)  
OI Contracts: 76,660 (-21%)

The Bank Nifty traded in a narrow range of 400 points and ended a volatile day on a flat note but with a negative bias. With PSU banks falling more than their private sector counterparts, the banking index fell and found support at 40,500.

Among banking stocks, Federal Bank (+1.0%) and HDFC Bank (+0.3%) were the biggest gainers, while Bank of Baroda (-2.6%) and Bandhan Bank (-2.4%) were the biggest laggards.

The Bank Nifty’s options contracts expiring on 23 February have significant positions at the 41,000 and 41,500 calls and 40,500 and 40,000 puts.

As per options data and OI analysis, Bank Nifty’s range for the 29th March expiry is between 39,000 and 42,200. On the other hand, 40,200 and 41,100 is the short-term range for the current week.

FII and DII Data💰

The Foreign Institutional Investors (FIIs) bought shares worth ₹525 crore, while Domestic Institutional Investors (DIIs) sold shares worth ₹235 crore in the cash market. In the derivatives market, FIIs bought index futures worth ₹966 crore and sold index options worth ₹3,978 crore. Further, they bought stock futures worth ₹406 crore and sold stock options worth ₹40 crore.

India VIX 

The India VIX rose for the fourth straight day and settled 4.7% higher at 14.01.

Stock Action📊

Long build-up was seen in IEX, Siemens, NTPC, Polycab and Hindustan Aeronautics.  

Short build-up was seen in Canara Bank, Shriram Finance, HDFC AMC, Aditya Birla  Fashion and CONCOR.  

Under F&O Ban: Vodafone Idea.

*In Futures and Options or F&O, long build-up means an increase in Open Interest (OI) along with an increase in price, and short build-up means an increase in Open Interest (OI) along with a decrease in price.

**Source: nseindia.com. Cash market figures are provisional.