Mazhar Mohammad of Chartviewindia feels if the weakness continues below 17,200 levels then the Nifty shall slide down into the zone of 16,900 – 16,800 levels.
The market remained directionless for the third consecutive session and finally settled with marginal losses on February 18 on the back of weak global cues amid Ukraine-Russia tensions. Auto, IT, pharma, select FMCG and metals stocks dragged the market down.
On Friday, the BSE Sensex fell 59 points to 57,833, while the Nifty50 declined 28.30 points to 17,276 and formed bullish candle which resembles Spinning Top kind of pattern formation on the daily charts, continuing to struggle around its 20-day SMA (17,353) for the third session in a row.
“16,800 looks like a double bottom formation provided this level holds going forward which can be slightly advantageous to bulls at this point in time. Hence, going forward, strength in the index shall not be expected unless it closes above 17,400 levels. On such a close, the current pullback swing can expand towards 17,640 levels,” says Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
Contrary to this, he feels if the weakness continues below 17,200 levels then the index shall slide down into the zone of 16,900 – 16,800 levels. For the time being, “buying should be considered only on a close above 17,400 levels whereas intraday shorting can be done below 17,200 for targets towards 17,100 – 17,050 levels,” he says.
The broader markets witnessed major selling pressure in comparison with benchmarks. The Nifty Midcap 100 and Smallcap 100 indices closed around a percent lower.
We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks given in this story are the aggregates of three-month data and not of the current month only.
Key support and resistance levels on the Nifty
As per the pivot charts, the key support levels for the Nifty are placed at 17,203, followed by 17,130. If the index moves up, the key resistance levels to watch out for are 17,365 and 17,454.
Nifty Bank
The Nifty Bank outperformed frontline as well as broader markets, rising 67 points to settle at 37,599 on February 18. The important pivot level, which will act as crucial support for the index, is placed at 37,330, followed by 37,060. On the upside, key resistance levels are placed at 37,843 and 38,087 levels.
Maximum Call open interest of 71.53 lakh contracts was seen at 18000 strike, which will act as a crucial resistance level in the February series.
This is followed by 17500 strike, which holds 48.09 lakh contracts, and 17800 strike, which has accumulated 38.73 lakh contracts.
Call writing was seen at 18000 strike, which added 22.05 lakh contracts, followed by 17800 strike which added 14.51 lakh contracts, and 17900 strike which added 13.40 lakh contracts.
Call unwinding was seen at 16700 strike, which shed 2,400 contracts, followed by 16600 strike which shed 600 contracts and 16400 strike which shed 500 contracts.
21 stocks saw long build-up
An increase in open interest, along with an increase in price, mostly indicates a build-up of long positions. Based on the open interest future percentage, here are the top 10 stocks in which a long build-up was seen.
