NIFTY 50 & BANK NIFTY retreat, test support after weekly gains

Asian markets update

Indian markets are set for a flat to positive open with the GIFT NIFTY up 0.1%. This comes despite mixed signals out of Asia, where Japan's Nikkei 225 fell 1.3%, while Hong Kong's Hang Seng index gained 0.2%.

U.S. market update

U.S. stocks closed mixed on Monday ahead of the release of February inflation data. This comes ahead of the Federal Reserve's policy meeting on 20th March. The Dow Jones Industrial average rose 0.1% to 38,769, while the S&P 500 lost 0.1% to 5,117. The tech-heavy Nasdaq Composite fell 0.4% to 16,019.

NIFTY50

• March Futures: 22,421 (▼0.6%)
• Open Interest: 2,41,099 (▼4.3%)

The NIFTY50 started the week on a negative note and formed a bearish engulfing candle on the daily chart. After opening higher, the index faced resistance around 22,500 mark and traded below the open price throughout the day.

Experts believe that the index has witnessed profit-booking at higher levels and has seen significant call additions at 22,500 strike for the 14th March expiry. However, the index has immediate support between 22,200-22,250 zone. They believe that the broader trend of the index is positive and it has witnessed buying from key support levels. Traders are advised to monitor price action around key support zones and 20-DMA.

The 14 March open interest of NIFTY50 shows a significant concentration of calls on the 22,500 and 23,000 strikes. Conversely, the put base is concentrated at the 22,400 and 22,000 strikes. Based on the positioning of the OI, traders are expecting NIFTY50 to trade between 21,800 and 22,800 this week.

BANK NIFTY

• March Futures: 47,489 (▼1.0%)
• Open Interest: 1,28,998 (▼1.6%)

The BANK NIFTY fell over 1% and formed a negative candle on the daily chart, indicating selling pressure from the 48,000 level. Barring AU Small Finance Bank (+2.2%), all other 11 stocks of the banking index closed in the red. SBI (-1.8%) and Bandhan Bank (-1.6%) were the top losers.

As highlighted in yesterday's blog, the BANK NIFTY is approaching its key resistance zone of 48,000-48,200 after a strong fourth week of gains. According to experts, traders may want to keep an eye on the BANK NIFTY's price action between 46,800 and 46,900, the crucial support zone which also coincides with its 20-day moving average.

For BANKNIFTY's 13 March expiry, options data shows significant open interest at the 48,000 & 48,500 call strikes and the 47,500 & 47,000 put strikes. Based on the open interest, traders are eyeing BANKNIFTY's trading range between 46,000 and 48,700 this week.

FII-DII activity

In the cash market, both the Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) remained net buyers for the fourth day in a row on Monday. The FIIs bought shares worth ₹4,212 crore, while the DIIs purchased shares worth ₹3,238 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: ICICI Prudential, Interglobe Aviation (Indigo) and Siemens

Short build-up: Indian Hotels, Hindustan Copper, NMDC, PVR Inox and IndiaMART InterMESH

Catch up on yesterday’s trading insights from NIFTY 200! 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/

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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