Trade setup for Monday: 15 things to know before opening bell

March 10, 2024


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Market likely to climb towards 22,800 level The market is most likely to continue its northward journey in the coming sessions with next resistance at 22,600-22,800 area, given the continuation of higher highs, higher lows and bullish rising three method pattern formation along with positive bias in momentum indicators, experts said, adding 22,400-22,300 is expected to act as an immediate support for the Nifty 50.

On March 7, the benchmark indices closed off day's high but ended at new record closing high. The BSE Sensex rose 33 points to 74,119, while the Nifty 50 climbed 20 points to 22,494 and formed small bodied bearish candlestick pattern with lower shadow on the daily charts.

"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 said. He feels the upside targets to be watched around 22,800 levels in the next one week (1.618 percent Fibonacci projection of long-term up and down swings).

"Immediate support is at 22,310 levels." Ajit Mishra, SVP- Technical Research at Religare Broking also expects the Nifty to maintain the prevailing tone and gradually inch toward 22,800. Traders should maintain stock-specific trading approach and prefer index majors and large midcaps for long trades, he advised. The volatility decline maintained downtrend for the seventh consecutive session, making the trend favourable for bulls.

The India VIX, the fear gauge, dropped 4.77 percent to 13.61, from 14.30 levels. We have collated 15 data points to help you spot profitable trades: Story continues below Advertisement Remove Ad Key support and resistance levels on Nifty The pivot point calculator indicates that the Nifty may face resistance at 22,502 followed by 22,542 and 22,579 levels. On the lower side, the index is likely to take immediate support at 22,447, followed by 22,424 and 22,387. Bank Nifty On March 7, the Bank Nifty retreated a bit after hitting nearly two-month high in the previous trading session, and corrected 130 points to 47,834, forming a bearish candlestick pattern on the daily charts, which was on expected lines given the rally in the past days. Overall, the higher highs, higher lows formation is still intact, hence after current consolidation, the upward move towards record is likely, experts said. "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 said. Once sustained above 48,000 there are strong chances that the index is poised to surpass its all-time high of 48,600 mark in the near term, he said, adding the current support for the index is established in the range of 47,400-47,000. As per the pivot point calculator, Bank Nifty may see resistance at 47,866 followed by 48,086 and 48,209. On the lower side, the index is expected to take support at 47,761 followed by 47,684 and 47,560. Call options data Weekly options data suggests the 22,500 strike owned the maximum Call open interest with 2.7 crore contracts, which can act as a key level for the Nifty in the short term. It was followed by the 23,000 strike, which had 1.26 crore contracts, while the 22,700 strike had 1.05 crore contracts. Meaningful Call writing was seen at the 22,500 strike, which added 2.03 crore contracts, followed by the 22,900 strike adding 37.52 lakh contracts, and 22,700 strike with 29.68 lakh contracts. The maximum call unwinding was at the 22,400 strike, which shed 14.96 lakh contracts, followed by the 22,300 and 23,500 strikes, which shed 13.68 lakh and 9.63 lakh contracts. Put option data On the Put side, the maximum open interest was seen at 22,500 strike, which can act as a key level for the Nifty, with 1.28 crore contracts. It was followed by the 22,400 strike comprising 99.16 lakh contracts and then the 22,000 strike with 91.33 lakh contracts. Meaningful Put writing was at the 22,500 strike, which added 87.83 lakh contracts, followed by the 22,400 strike and 22,600 strike, which added 20.78 lakh and 4.57 lakh contracts. Put unwinding was seen at 21,800 strike, which shed 25.51 lakh contracts, followed by 22,300 and 22,000 strikes, which shed 22.76 lakh and 19.61 lakh contracts, respectively. Stocks with high delivery percentage A high delivery percentage suggests that investors are showing interest in the stock. HDFC Bank, Shree Cements, ICICI Lombard General Insurance Company, UltraTech Cement, and SBI Cards & Payment Services saw the highest delivery among the F&O stocks. 43 stocks see a long build-up A long build-up was seen in 43 stocks, which included Tata Chemicals, Tata Power Company, Tata Steel, Navin Fluorine International, and Indian Hotels. An increase in open interest (OI) and price indicates a build-up of long positions. 36 stocks see long unwinding Based on the OI percentage, 36 stocks saw long unwinding. These include Mahanagar Gas, ICICI Bank, Manappuram Finance, Grasim Industries, and Dixon Technologies. A decline in OI and price indicates long unwinding. 45 stocks see a short build-up A short build-up was seen in 45 stocks, including SAIL, Apollo Tyres, Mahindra & Mahindra, Indraprastha Gas, and SBI Life Insurance Company. An increase in OI along with a fall in price points to a build-up of short positions. 61 stocks see a short covering Based on the OI percentage, 61 stocks were on the short-covering list. These include Hindalco Industries, Cholamandalam Investment & Finance, Bajaj Finance, Berger Paints, and Asian Paints. A decrease in OI along with a price increase is an indication of short-covering. PCR The Nifty Put Call ratio (PCR), which indicates the mood of the equity market, fell to 1.27 on March 7, from 1.32 in the previous session. Above 1 PCR indicates that the trading volume of Put options is more than Call options, which generally suggests a bearish market ahead. Bulk Deals For more bulk deals, click here Stocks in the news InterGlobe Aviation: IndiGo co-founder Rakesh Gangwal is reportedly considering to sell up to 5.8 percent stake in InterGlobe Aviation, the airlines' parent company, higher than an earlier plan of 3.3 percent, CNBC-TV18 reported citing sources. The proposed equity sale aims to raise nearly Rs 6,600 crore, with a floor price set at Rs 2,925 per share, according to the report. JM Financial: The SEBI has barred JM Financial from taking any new mandate for acting as a lead manager for any public issue of debt securities. Rail Vikas Nigam: The state-run railway company has received Letter of Awards (LoA) worth Rs 1,298.2 crore from Himachal Pradesh State Electricity Board for the development of distribution infrastructure at south & north zones of Himachal Pradesh under the Revamped Reformsbased and Results-linked, Distribution Sector Scheme (Loss Reduction Works). Torrent Power: The Gujarat-based power company has received Letter of Award from Maharashtra State Electricity Distribution Co, for setting up of 306 MW grid-connected solar PV projects in Nasik, Maharashtra, with tariff rate at Rs 3.10 per kWh. The project cost is Rs 1,540 crore. GAIL (India): The gas distribution company, Oil and Natural Gas Corporation (ONGC), and Shell Energy India (SEI) signed a tripartite Memorandum of Understanding (MoU) to explore opportunities for importing ethane and other hydrocarbons. PNC Infratech: The infrastructure company has announced the execution of concession agreement for a HAM (Hybrid Annuity Mode) project with MP Road Development Corporation (MPRDC) for a bid project worth Rs 1,174 crore. Funds Flow (Rs crore) FII and DII data Foreign institutional investors (FIIs) net bought shares worth Rs 7,304.11 crore, while domestic institutional investors (DIIs) purchased Rs 2,601.81 crore worth of stocks on March 7, provisional data from the NSE showed. Stock under F&O ban on NSE The NSE has added Tata Chemicals and SAIL to the F&O ban list for March 11, while retaining Manappuram Finance, Mahanagar Gas, and Zee Entertainment Enterprises on the said list. Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit. Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions. Disclsoure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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