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With the formation of a bullish candlestick pattern after neutral patterns in the last two sessions, the bulls seem to have turned strong and can take the Nifty50 towards the 22,500 mark in the coming sessions, provided the index holds at 22,200. Otherwise, there could be a consolidation with support at 22,000, experts said.
On February 20, the BSE Sensex jumped 349 points to 73,057, while the Nifty 50 rose 75 points to end at a record close of 22,197, continuing an uptrend for six straight days.
“A long bullish candle has formed on the daily chart, indicating an attempt at a decisive bullish breakout of the crucial overhead resistance around 22,150-22,200 levels,” said Nagaraj Shetti, senior technical research analyst at HDFC Securities.
Positive chart patterns such as higher highs and higher lows continued on the daily chart and the current upward movement is in line with the new formation of higher highs.
He feels that the short-term trend of Nifty remains bullish. “A decisive move above 22,200 is likely to open a sharp rise towards the upper path of 22,500-22,600 levels in the near term. Immediate support is at 22,080 levels,” Nagaraj said.
Rupak De, Senior Technical Analyst at LKP Securities, also believes that the trend remains strong as the index has remained above the psychological level of 22,000 as well as the 21-day EMA (exponential moving average – 21,814) in the daily chart.
“At the upper end, it may move towards 22,400/22,600 once the index decisively surpasses the 22,200 mark. Support at the lower end is identified at 22,000,” he said.
The India VIX, the fear index, remained above the 16 mark, which may support the bears in the coming sessions. The index rose 0.34 percent to the level of 16.07.
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We’ve compiled 15 data points to help you spot profitable trades:
Key Support and Resistance Levels in Nifty and Bank Nifty
The pivot point calculator indicates that the Nifty is likely to get immediate support at 22,088, followed by 22,048 and 21,983, while on the upper side you can see immediate resistance at 22,218, followed by 22,258 and 22,323.
Meanwhile, on February 20, the Bank Nifty also began a strong and sustained upward journey for the sixth consecutive session, rising 559 points or 1.2 per cent to 47,094. The index has formed a long bullish candlestick pattern on the daily chart, after decisively breaking the descending resistance trend line.
“Bank Nifty bulls maintained their dominance, closing above 47,000 level, indicating strong buying mode. Immediate support is now set at 46,700, marked by fresh Put writings,” said Kunal Shah, Technical Analyst senior and derivatives at LKP Securities.
Consider that the index is expected to reach the short-term target of 48,000, and any decline is considered a buying opportunity.
As per the pivot point calculator, the Bank Nifty is expected to find support at 46,573, followed by 46,391 and 46,097 levels, while on the upper side, the index may find resistance at 47,160 followed by 47,342 and 47,635 levels.
Purchase option data
On the weekly options data front, the 23,000 strike continued to hold the maximum Call open interest with 64.35 lakh contracts, which may act as a key resistance level for the Nifty in the near term. It was followed by the strike of 22,600, which had contracts of 63.48 lakh, while the strike of 22,800 had contracts of 55.12 lakh.
Significant call drafting was seen in the 22,700 strike, which added 12.42 lakh contracts, followed by 22,200 and 22,800 strikes which added 10.72 lakh and 8.52 lakh contracts, respectively.
Call’s maximum liquidation occurred in the 21,900 strike, which eliminated 3.67 lakh contracts, followed by 22,000 and 22,100 strikes, which eliminated 3.5 lakh and 2.16 lakh contracts.
put options data
On the sell side, the maximum open interest was observed at 22,000 strike, which may act as a key support level for Nifty, with contracts at 85.43 lakh. This was followed by 22,100 strikes comprising 63.6 lakh contracts and then 21,500 strikes comprising 54.59 lakh contracts.
Significant Put writing was 22,200 strikes, which added 17.89 lakh contracts, followed by 22,100 strikes and 21,400 strikes, which added 17.64 lakh contracts and 16.94 lakh contracts.
The liquidation was seen in 21,000 strikes, which eliminated 11.69 lakh contracts, followed by 21,200 strikes, which eliminated 6.21 lakh contracts and 21,300 strikes, which eliminated 4.07 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. IndiaMART InterMESH, Havells India, Dabur India, UltraTech Cement and HCL Technologies recorded the highest delivery among F&O stocks.
44 Stocks See Long Accumulation
Long accumulation was seen in 44 stocks including RBL Bank, Deepak Nitrite, Oberoi Realty, Manappuram Finance and Tata Communications. An increase in open interest (OI) and price indicates an accumulation of long positions.
46 stocks see a long sell-off
Based on OI percentage, 46 stocks saw prolonged sell-off including Polycab India, Biocon, Oracle Financial Services Software, Mahanagar Gas and Coal India. A decline in OI and price indicates a prolonged sell-off.
54 Stocks See Brief Accumulation
Brief accumulation was seen in 54 stocks including Balrampur Chini Mills, Hero MotoCorp, Coromandel International, Cholamandalam Investment & Finance and Birlasoft. A rise in OI coupled with a fall in price points to an accumulation of short positions.
41 stocks see short covering
Based on OI percentage, 41 stocks were on the short covering list. This included Zee Entertainment Enterprises, PI Industries, Mahindra and Mahindra, SBI Life Insurance Company and Aurobindo Pharma. A decrease in OI along with an increase in price is an indication of short covering.
PCR
The Nifty Put Call Index (PCR), which indicates the mood of the stock market, fell to 1.24 on February 20 from the previous session’s levels of 1.25. PCR above 1 indicates that the trading volume of put options is greater than that of call options, which generally indicates increasing bearish sentiment.
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Results on February 21
Arshiya, Manjeera Constructions, Marble City India and VJTF Eduservices will be in focus ahead of quarterly earnings on February 21.
Actions in the news
ABB India: The technology leader in electrification and automation posted a net profit of Rs 345 crore for the quarter ended December 2023, a growth of 13 per cent over the year-ago period. Revenue from operations grew 14 per cent year-on-year to Rs 2,757 crore during the quarter, and order intake increased 35 per cent to Rs 3,147 crore during Q4FY23.
Devyani International: Yum Restaurant India is likely to sell a 4.4 per cent equity stake in Devyani International through block deals, reports CNBC-TV18 citing sources. The floor price has been set at Rs 153.5 per share, which is a 7.4 per cent discount to the closing price on February 20. The total size of the block deal is likely to be Rs 814.8 crore.
Swan energy: The company said the board approved the launch of qualified institution placement (QIP) on February 20. The minimum price was set at Rs 703.29 per share.
Union Bank of India: The Committee of Directors for Capital Fund Raising approved raising funds of up to Rs 3,000 crore through qualified institution placement (QIP) issuance. The QIP issue opened on February 20, with a floor price of Rs 142.78 per share.
Termax: The company entered into a licensing and technical assistance agreement with South Korea-based Flowtech Co to obtain technology to manufacture polycarboxylate ether products to strengthen its construction chemicals business portfolio.
GOCL Corporation: Mauritius-based promoter Hinduja Capital is going to reduce stake in GOCL by about 1 per cent, i.e. from the current 73.83 per cent to about 72.83 per cent, through bulk or block deals. This will allow the company to obtain the necessary licenses to start and expand the business in the defense sector.
Fund Flow (Million Rupees)
FII and DII data
Foreign institutional investors (FIIs) sold shares worth Rs 1,335.51 crore, while domestic institutional investors (DIIs) bought shares worth Rs 1,491.33 crore on February 20, provisional data from the NSE.
Stocks under F&O ban on NSE
The NSE has added Balrampur Chini Mills, GMR Airports Infrastructure, GNFC and RBL Bank to the F&O ban list for February 21, while maintaining Bandhan Bank, Biocon, Canara Bank, Hindustan Copper, India Cements, Indus Towers , National Aluminum Company and SAIL. and Zee Entertainment Enterprises to the said list. Aditya Birla Fashion & Retail and Ashok Leyland were removed from the said list.
Prohibited securities in the F&O segment include companies where derivative contracts exceed 95 percent of the market-wide position limit.
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