Trade Setup for Tuesday: 15 Key Points to Know Before Opening Bell
As the market continues to trade at record highs, experts predict that there may be some consolidation or minor profit booking in the coming sessions. The Nifty 50 is expected to reach the 22,500 mark in its upward journey, with the key support area at 21,900-21,950.
On February 19, the BSE Sensex rose 282 points to reach 72,708, while the Nifty 50 climbed 82 points to close at a record high of 22,122. The daily candlestick pattern resembles a Doji or Spinning Top, indicating uncertainty in the market.
Nagaraj Shetti, a senior technical research analyst, suggests that there may be a consolidation or minor dip in the market in the short term. However, the near-term trend for the Nifty remains positive, with immediate support at 21,950 levels.
According to derivatives & technical analyst Ashwin Ramani, the option activity at the 22,200 strike will provide insight into Nifty’s intraday direction on February 20. The India VIX, the fear index, has also risen, indicating some discomfort for bulls.
Key support and resistance levels for the Nifty and Bank Nifty have been identified. The Nifty is likely to find support at 22,047, while resistance is expected at 22,137. The Bank Nifty continues to rise, but there is a loss of momentum on the way up. Consolidation towards the 46,200-46,100 zone may provide a good entry point for long positions.
In terms of options data, the maximum Call open interest is at the 23,000 strike, indicating a key resistance level for the Nifty. On the Put side, the 22,000 strike has the maximum open interest, acting as a key support level.
Delivery percentage suggests investor interest in stocks such as ICICI Lombard General Insurance Company, Kotak Mahindra Bank, IndiaMART InterMESH, JK Cement, and Havells India.
There is a long build-up in stocks including Biocon, Bajaj Auto, Metropolis Healthcare, Dixon Technologies, and Laurus Labs. Conversely, there is long unwinding in stocks like Federal Bank, National Aluminium Company, Canara Bank, India Cements, and Hindustan Copper.
Short build-up is seen in stocks like Lupin, HDFC AMC, SBI Life Insurance Company, Bata India, and Kotak Mahindra Bank. On the other hand, there is short-covering in stocks such as Maruti Suzuki, Mahindra & Mahindra, Delta Corp, Polycab India, and Balrampur Chini Mills.
The Nifty Put Call ratio (PCR) rose to 1.25 on February 19, indicating increasing bearish sentiment in the market.
Biocon has been added to the F&O ban list for February 20, while Aditya Birla Fashion & Retail, Ashok Leyland, Bandhan Bank, and others remain on the list.
Please note: The securities listed under the F&O segment have reached the market-wide position limit and are therefore banned.
Analyst comment
Neutral news.
As an analyst, the market is expected to see some consolidation or minor profit booking in the short term. The Nifty 50 is likely to reach the 22,500 mark, with support levels at 21,900-21,950. Options data and delivery percentage suggest investor interest in specific stocks. The Nifty Put Call ratio indicates increasing bearish sentiment. Biocon has been added to the F&O ban list.