Bank Nifty hits 48,000 on expiry day, crucial support now at 47,700

The Bank Nifty rebounded from early losses to hit the psychological mark of 48,000 on March 6, the expiry day.

Bank Nifty futures gained approximately 0.5 percent over the last two days, with 32.1 percent cumulative increase in Open Interest (OI) during the period, suggesting a strong long buildup.

On the options front, the Bank Nifty Put-Call Ratio (PCR) stands strong at 1.26. There is substantial call writing at the 47,700-47,800 strikes, coupled with put writing at 47,500 and 47,400 levels, indicating a trading range of 47,200 to 47,900 for the upcoming sessions.

Here is what technical and derivative analysts have to say Bank Nifty:

According to Sudeep Shah, DVP and Head of Derivative and Technical Research at SBI Securities, “Evidence of momentum returning to the Banking Index is visible, sustaining above the 47,200 zone, the upper band of the horizontal channel.

“Looking ahead, the support zone is likely to be around 47,700. Heavy put writing is now evident at levels between 47,500-48,000. As long as the indices defend this level, the current momentum could propel Bank Nifty towards the 48,000 and 48,200 zones.”

Bank Nifty outperformed the Nifty, led by buying in HDFC Bank and State Bank of India, ICICI Securities said. On the weekly expiry day, Bank Nifty is expected to trade with positive bias and move towards 48,000, it said.

Akshay Bhagwat, Senior Vice president Derivative research at JM financial, said “48000 CE writing has been challenged in the first hour of trade and writers have been noted shifting their CE writing bets to higher strikes of 48500. Major PE writing is at 47000 while PE writing base has shifted higher to 47500 PE. 48000 is the pivotal zone today.”

The index is expected to oscillate in the range of 400 points from 48,000. Looking at the broader market breadth, expiry is expected to be below 48,000, Bhagwat said.

Mandar Bhojane, Research Analyst at Choice Broking, said, bulls have maintained control, keeping the index above the crucial support level of 47,400. The immediate resistance is at 48,000, and a successful breach of this level will propel the index towards its all-time high.

The overall outlook remains bullish and a decline toward the support level should be considered a buying opportunity, he said.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.