Trade setup for 22 March: Bank Nifty lifts sentiment, reclaims 200-DMA

Blog | F&O

Asian Markets Update @ 7 am 

The SGX Nifty is trading 8 points (+0.3%) higher than its last close, indicating a flat to a positive start for the Nifty50 today. Major Asian markets are trading in the green. Japan's Nikkei 225 gained 1.6%, while Hong Kong's Hang Seng Index advanced 1.5%.

Global Market Update

US stocks rose on Tuesday, led by banking stocks after Treasury Secretary Janet Yellen pledged more support for the banks. The Dow Jones rose 0.9% to end at 32,560. The S&P 500 advanced 1.3% to 4,002, while the Nasdaq Composite jumped 1.5% and finished at 11,860.

Index Action

March Futures @ 17,169 📈140 (+0.8%)
OI Contracts: 2,45,902 (+0.2%)

The Nifty50 extended its opening gains and settled above the 17,100 level. A sharp recovery in banking and financial stocks led the index higher, but the gains were capped by caution in IT stocks.

For further clues, traders will closely watch the outcome of the US Federal Reserve's interest rate decision, which will be announced later today.

Sectorally, IT (-0.9%) and FMCG (-0.6%) were the biggest draggers, while PSU Bank (+1.6%) and Financial Services (+1.4%) were among the gainers.

The Nifty50 options expiring on 23 March have significant positions at 17,200 and 17,800 calls and 17,000 and 16,900 puts.

According to options data and OI analysis, the Nifty50's long range for the 29 March expiry is between 16,700 and 17,500. On the other hand, 16,900 and 17,300 is the short-term range for this week.

Bank Nifty
March Futures @ 40,048 📈565 (+1.4%)
OI Contracts: 1,03,270 (-0.9%)

Encouraged by the steps taken to shield the global banking sector, the Bank Nifty rose sharply and came within striking distance of the 40,000 level. A surge in PSU and private bank stocks helped the index close above 200-DMA.

Among banking stocks, Bank of Baroda (+2.7%) and IDFC First Bank (+2.5%) were the top gainers, whereas Federal Bank (-0.2%) was the only one to end in the red.

The Bank Nifty's options expiring on 23 March have significant positions at the 41,500 and 40,000 calls and 39,500 and 39,000 puts.

According to options data and OI analysis, Bank Nifty's range for the 29th March expiry is between 38,900 and 41,000. On the other hand, 39,400 and 40,400 is the short-term range for this week.

FII and DII Data💰

The Foreign Institutional Investors (FIIs) sold shares worth ₹1,454 crore, while Domestic Institutional Investors (DIIs) bought shares worth ₹1,946 crore in the cash market. In the derivatives market, FIIs sold index futures worth ₹129 crore and sold index options worth ₹2,441 crore. Further, they bought stock futures worth ₹2,196 crore and sold stock options worth ₹222 crore.

India VIX 

The fear gauge India VIX fell 5.8% to 15.08.

Stock Action📊

Long build-up was seen in Bajaj-Auto, Indiamart Intermesh, Indraprastha Gas, SRF and SBI.

Short build-up was seen in Voltas, Glenmark Pharma, LIC Housing Finance, Birlasoft and Infosys.

Under F&O Ban: Biocon and Indiabulls Housing Finance.

*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: Cash market figures are provisional.

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