F&O Manual | Indices trade higher; Bank Nifty momentum continues above 46,750

F&O Manual | Indices trade higher; Bank Nifty momentum continues above 46,750

Strong global cues propelled Nifty to hit new record high of 22,297 on February 23 opening deals, while Sensex gained over 100 points.

The benchmark indices traded higher around their record levels amid heightened volatility intraday on February 23. A bearish engulfing candlestick pattern formed in the Nifty the previous day was invalidated as the index bounced from its 20-day EMA.

According to experts, the indices are likely to find support around the 22,070-22,100 zone. As long as this zone holds, the trend remains positive, and the indices could potentially move higher, reaching up to 22,350-22,400 in the coming sessions.

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Read more: Bullish crossover momentum positions Nifty to test 22,400-22,600 in near term

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Bars in red indicate the change in open interest (OI) of call writers, while the green bars show the change in OI of put writers

Regarding Nifty, Tejas Shah, Vice President of Technical Research at JM Financial, stated, “Presently, the momentum is with the bulls, and we believe that as long as Nifty is holding above the 21,800 mark, the present rally that started recently is likely to continue for a few more days or weeks. Supports for Nifty are now seen at 22,000 and 21,800 levels. On the higher side, the immediate resistance zone for Nifty is at 22,250-300 levels, and the next resistance is at the 22,500 mark.”

Bank Nifty

For Bank Nifty, the PCR for the monthly series is at 0.91. Significant call writing was observed at 47,000-47,500 strikes, and 47,000-46,500 puts, implying a range of 47,500 to 46,500 for the coming few sessions.

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“Going forward, the immediate support for Bank Nifty lies at the 50 DMA zone of 46,650-46,750, and until this holds, the current momentum could strengthen up to the 47,400-47,600 zone. In case 46,650 breaks, the index can test its next support placed at 46,400-46,250,” Sudeep Shah, DVP and head of derivative and technical research at SBI Securities, said.

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