Given the persistence of higher highs and lower lows, the formation of a bullish rising three-method pattern, and the positive bias in momentum indicators, experts said that the market is most likely to continue its upward trajectory in the upcoming sessions, with the 22,600–22,800 area serving as the next resistance. Additionally, 22,400–22,300 is anticipated to act as an immediate support for the Nifty 50.
The benchmark indices closed at a fresh record closing high on March 7, despite falling from the day’s high. The Nifty 50 gained 20 points to 22,494 and created a small-bodied bearish candlestick pattern with a lower shadow on the daily charts, while the BSE Sensex increased 33 points to 74,119.
“Technically, this pattern indicates breather type formation post sharp upside breakout of Wednesday. The bullish rising three method pattern is still intact, and one may expect further upside in the near term,” Nagaraj Shetti, senior technical research analyst at HDFC Securities stated.
In the coming week, he believes that the upside goals should be monitored around 22,800 levels (1.618 percent Fibonacci projection of long-term up and down swings). “Immediate support is at 22,310 levels.”
Religare Broking’s SVP of Technical Research, Ajit Mishra, concurs that the Nifty will continue in its current direction and nudge its way closer to 22,800. He encouraged traders to stick to a stock-specific trading strategy and to favor index majors and large midcaps when making long trades.
Important Nifty support and resistance figures
The Nifty may encounter resistance at 22,502, followed by 22,542 and 22,579 levels, according to the pivot point calculator. The index is probably going to find quick support at 22,447 on the bottom end, then 22,424 and 22,387.
After reaching a nearly two-month high in the previous trading session, the Bank Nifty slightly declined on March 7. It dropped 130 points to 47,834, establishing a bearish candlestick pattern on the daily charts, which was to be expected considering the recent rally.
“It is expected that Bank Nifty will continue the up move as the daily momentum indicator has provided a fresh crossover which is a bullish sign,” Arvinder Singh Nanda, senior vice president at Master Capital Services added.
The pivot point calculator indicates that 47,866, 48,086 and 48,209 could be resistance points for the Bank Nifty. The index is anticipated to find support at 47,761, 47,684, and 47,560 on the bottom end.
Call options status
The 22,500 strike added 2.03 crore contracts, the 22,900 strike added 37.52 lakh contracts, and the 22,700 strike added 29.68 lakh contracts. These strikes all demonstrated meaningful call writing.
The 22,400 strike resulted in the greatest call unwinding of 14.96 lakh contracts, with the 22,300 and 23,500 strikes following suit with 13.68 lakh and 9.63 lakh contracts shed, respectively.
Put option status
At the 22,500 strike, which added 2.03 crore contracts, meaningful call writing was observed. This was followed by the 22,900 strike, which added 37.52 lakh contracts, and the 22,700 strike, which added 29.68 lakh contracts.
Following the 22,400 strike, which dropped 14.96 lakh contracts, there was a maximum call unwinding during the 22,300 and 23,500 strikes, which shed 13.68 lakh and 9.63 lakh contracts, respectively.
Best delivery percentage stocks
A high delivery rate indicates that the stock is attracting the attention of investors. Among the F&O equities, the highest delivery was observed in HDFC Bank, Shree Cements, ICICI Lombard General Insurance Company, UltraTech Cement, and SBI Cards & Payment Services.
43 stocks to witness a massive build-up
43 stocks, including Tata Chemicals, Tata Power Company, Tata Steel, Navin Fluorine International, and Indian Hotels, saw a protracted build-up. A build-up of long holdings is indicated by an increase in both price and open interest (OI).
36 stocks to experience long unwinding
The OI % indicated that 36 stocks experienced long unwinding. Grasim Industries, Dixon Technologies, Manappuram Finance, ICICI Bank, and Mahanagar Gas are a few of these. A drop in price and OI suggests a lengthy unwinding
45 stocks witnesses brisk build-up
45 equities, including SAIL, Apollo Tyres, Mahindra & Mahindra, Indraprastha Gas, and SBI Life Insurance Company, saw a brief build-up. A rise in OI and a decline in price indicate the accumulation of short bets.
61 stocks to witness a brisk covering
Sixty-one equities were on the short-covering list based on the OI %. These companies are Asian Paints, Berger Paints, Bajaj Finance, Hindalco Industries, and Cholamandalam Investment & Finance. Short-covering is indicated by a decline in OI and an increase in price.
Nifty Put Call ratio (PCR)
The Nifty Put Call ratio (PCR), a gauge of the state of the equity market, dropped from 1.32 to 1.27 on March 7. When the Put option trading volume exceeds the Call option trading volume, the PCR value is greater than 1, which typically portends a negative market.
Thriving Deals
Flow of Capital in Cr (INR)
FII and DII status
On March 7, provisional data from the NSE revealed that domestic institutional investors (DIIs) bought stocks worth Rs 2,601.81 crore, while foreign institutional investors (FIIs) net bought shares worth Rs 7,304.11 crore.
Banned equities in accordance with F&O ban on NSE
Manappuram Finance, Mahanagar Gas, and Zee Entertainment Enterprises are still on the F&O ban list for March 11, while Tata Chemicals and SAIL have been added by the NSE.
Securities that are prohibited under the F&O segment comprise businesses whose derivative contracts exceed 95 percent of the maximum position limit on the market.
Note: The article has been extracted from the report earlier published by Moneycontrol. It is suggested to consult with qualified professionals before approaching to any investment decisions.
