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  4. Can BANK NIFTY breach 46,000 resistance at expiry? Watch these levels to plan trades

Can BANK NIFTY breach 46,000 resistance at expiry? Watch these levels to plan trades

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Upstox

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4 min read • Updated: February 7, 2024, 1:27 PM

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Summary

BANK NIFTY remains range-bound, consolidating between its 50 and 200 DMAs. It is forming a base around its budget day low (45,600), as noted in yesterday's blog. Today's expiry is key, with 46,000 acting as the immediate hurdle. Above 46,000, the 20-DMA (46,250) is the next resistance. If it falls below the budget day low, support lies at around 200-DMA (44,800).

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Key BANK NIFTY levels to watch before market opening

Asian markets update 7 am

The GIFT NIFTY is trading above 22,100 (+0.5%), indicating a positive start for Indian equities today. Meanwhile, Asian markets are trading mixed. Japan's Nikkei 225 is down 0.1%, while Hong Kong's Hang Seng Index is up 1%.

U.S. market update

US stocks rose on Tuesday as investors digested comments from various Fed officials on the possibility of interest rate cuts, as well as the latest batch of corporate results. The Dow Jones rose 0.3% to 38,521, while the S&P 500 climbed 0.2% to settle at 4,954. The tech-heavy Nasdaq Composite closed flat at 15,609.

NIFTY50

  • February Futures: 21,979 (▲0.91%)
  • Open Interest: 2,40,946 (▲2.16%)

Despite weak global cues and a rising dollar index, the NIFTY50 managed to buck the trend and close 0.7% higher yesterday, reversing its Monday’s losses. The rebound was led by IT, Oil & Gas, and Metal stocks.

As mentioned in our blog yesterday, the index remains in a consolidation phase between its all-time high of 22,126 and its 20-day moving average around 21,650. Experts believe a decisive close above or below this range will provide further directional cues. Notably, 22,000 strike call option witnessed maximum unwinding yesterday.

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As per the open interest, the maximum call base for February 8 expiry is present at 22,500 and 22,200 strikes. On the other hand, the put options have base at 21,700 and 21,900 strikes. As per the option premiums and open interest, traders are expecting NIFTY50 to trade between 22,300 and 21,500.

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You can track open interest of the NIFTY50 here: https://pro.upstox.com/

BANK NIFTY

  • February Futures: 45,971 (▼0.02%)
  • Open Interest: 2,00,266 (▼7.88%)

The BANK NIFTY continued its range-bound movement, consolidating between its 50 and 200 DMAs. As highlighted in our yesterday's blog, the banking index is forming a base around its budget day low (around 45,600). For today’s expiry, it will be crucial to observe the price action near the budget day low.

According to experts, the immediate hurdle for today's expiry is the 46,000 level. Above 46,000, the next resistance is the 20-DMA (46,250). On the other hand, if the index closes below the budget day low, the next critical support is around the 200 DMA (44,800).

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On the options front, the BANK NIFTY call options have significant open interest at the 47,000 and 46,000 strikes for today’s expiry. Conversely, the put options have the highest open interest at the 44,000 and 45,000 strikes. Based on the options data, the BANK NIFTY's trading range for today’s expiry could be between 46,600 and 44,800.

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You can track open interest of the BANK NIFTY here: https://pro.upstox.com/

FII-DII activity

In the cash market, both Foreign Institutional Investors(FIIs) and Domestic Insitutional Investors(DIIs) turned net buyers on Tuesday. The FIIs bought shares worth ₹92 crore, while DIIs purchased shares worth ₹1,096 crore. To track the ratio of long and short open positions of FIIs in the index, log in to https://pro.upstox.com/ ➡️F&O➡️FII-DII Activity➡️FII Derivatives

Stock scanner

Long build-up: Steel Authority Of India, Oracle Financial Services, Petronet LNG, Indian Oil Corporation, Ipca Laboratories and Biocon.

Short build-up: Crompton Greaves, Power Grid and City Union Bank.

Catch up on yesterday's NIFTY 200 insights! Don't miss our market recap blog, offering valuable insights in a concise format. Click here to read and stay informed.

To access a specially curated smartlist of most traded and active stocks, as well as the OI gainers and losers, simply log in: https://pro.upstox.com/ ➡️F&O➡️Options smartlist/Futures smartlist

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: Upstox and NSE.

Disclaimer: Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. The information is only for consumption by the client and such material should not be redistributed. We do not recommend any particular stock, securities and strategies for trading. The securities quoted are exemplary and are not recommendatory. The stock names mentioned in this article are purely for showing how to do analysis. Take your own decision before investing.