Trade setup for 12 February: NIFTY50 remains range-bound, BANK NIFTY holds 200-DMA
Upstox
4 min read • Updated: February 12, 2024, 2:26 PM
Summary
As highlighted in our previous blog, the BANK NIFTY remains range-bound between its 50-DMA ( around 46,800) and its 200-DMA ( around 44,800). Experts suggest that the index is likely to remain range-bound till it closes above or below the mentioned moving averages.
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Asian markets update 7 am
The GIFT NIFTY is trading higher (+0.5%), indicating a gap-up start for the Indian equities today. Meanwhile, all the major Asian markets are shut including Japan, Hong Kong and South Korea due to Lunar New Year celebrations and Japan's National Foundation Day.
US market update
US stocks rose on Friday after December’s revised inflation reading came lower than earlier reported. The benchmark S&P 500 closed above the 5,000 mark for the first time ever. It rose 0.5% to 5,026 and the technology heavy Nasdaq Composite jumped 1.2% to 15,990. The Dow Jones Industrial Average slipped 0.1% to 38,671.
NIFTY50
February Futures: 21,842 (▲0.1%) Open Interest: 2,33,698 (▼4.9%)
The NIFTY50 began Friday’s trading session flat and traded in a narrow range. It found support at its 20-day moving average (DMA), witnessing buying from the lower levels. The weekly chart shows the 400 point consolidation, forming an inside bar candle.
As highlighted in the chart below, the NIFTY50 remains above its key support zone, coinciding with its 20-DMA. Experts believe that on the weekly time frame, the index is still in a higher high and higher low structure. The trend will be only negated once the NIFTY50 closes below 21,137. Meanwhile, the resistance for the index remains at the previous all-time high zone.
Open interest data for the NIFTY50's 15th February expiry has significant call base at the 22,000 and 22,500 strikes. Conversely, the 21,500 and 21,000 strikes hold the maximum put base. This suggests that market participants expect the NIFTY50 to trade in a range of 21,100-22,300 for 15 February expiry.
BANK NIFTY
February Futures: 45,899 (▲1.6%) Open Interest: 2,07,796 (▼5.8%)
After a muted start, the BANK NIFTY displayed strength, bouncing back from its 200-DMA for the fourth time. This once again confirms the support at this level, which helped the BANK NIFTY close higher on Friday.
As noted in our previous blog, that BANK NIFTY remains range-bound between its 50-DMA ( around 46,800) and its 200-DMA ( around 44,800). Experts suggest that the index is likely to remain range-bound till it closes above or below the mentioned moving averages.
For BANK NIFTY's February 14th expiry, the options data shows significant open interest at the 46,000 & 47,000 call option strikes and 45,000 & 45,500 put option strikes. As per the open interest, traders eye BANK NIFTY trading range between 44,500 and 46,800 for February 14th expiry.
You can track open interest of the BANK NIFTY here: https://pro.upstox.com/
FII-DII activity
In the cash market, the Foreign Institutional Investors (FIIs) bought shares worth ₹ 141 crore, while the Domestic Institutional Investors (DIIs) sold shares worth ₹421 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: Zee Entertainment, ACC, Bharat Forge, Sun Pharma and Atul Ltd.
Short build-up: Power Finance Corporation, Ramco Cements, REC and MRF.
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.
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