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The Indian stock market witnessed a session of selling pressure, particularly impacting the Nifty 50 and Bank Nifty indices, according to the article “Trade setup for March 11: Top 15 things to know before the opening bell.” The Nifty 50, after briefly touching its 20-day Exponential Moving Average (EMA) at 22,666, failed to sustain above this level, ultimately closing 92 points lower with above-average trading volumes. The market breadth, a measure of the number of stocks advancing versus declining, heavily favored the bears, indicating widespread selling. The technical analysis of the Nifty's chart pattern also suggests a negative outlook, although confirmation of this bearish trend is required in the subsequent trading session. Experts suggest that a decisive break below the 22,400 level could lead to a further decline towards 22,250, the low recorded on March 6. Conversely, the index is expected to encounter resistance in the 22,650-22,700 zone, and a break above this could pave the way for a move towards the 22,900-23,000 range. The article provides key levels for the Nifty 50 based on pivot points, identifying resistance at 22,617, 22,675, and 22,770, and support at 22,427, 22,369, and 22,274. A special formation on the daily charts, resembling a Shooting Star (although not a classical one), indicates selling pressure at higher levels and potential for a bearish reversal. However, the inability of the index to sustain above the short-term moving averages (10 and 20-day EMAs) is considered a negative signal. The Bank Nifty also exhibited weakness, forming a bearish candlestick pattern with a long upper wick on the daily timeframe, indicating a continuation of lower-high formations, which is generally considered a bearish sign. The index remained below all key moving averages (5, 10, 20, 50, 100, and 200-day EMAs), and a negative crossover in the Relative Strength Index (RSI), which stood at 38.99, further reinforces the negative outlook.
The article delves into the options data for both the Nifty 50 and Bank Nifty to gauge potential support and resistance levels. For the Nifty, the maximum Call open interest is concentrated at the 23,000 strike price, with 1.25 crore contracts, suggesting that this level could act as a significant resistance point in the short term. This is followed by the 23,500 and 22,700 strikes, with 1.06 crore and 95.91 lakh contracts, respectively. The maximum Call writing, indicating traders betting on the price not exceeding a certain level, was observed at the 22,700 strike, which saw an addition of 58.93 lakh contracts. The 23,000 and 23,500 strikes also witnessed substantial Call writing, adding 42.9 lakh and 35.91 lakh contracts, respectively. Conversely, the maximum Call unwinding, suggesting traders closing out their bearish positions, was seen at the 22,800 strike, which shed 6.03 lakh contracts. On the Put side, the 22,000 strike holds the maximum Put open interest, with 85.9 lakh contracts, potentially serving as a key support level for the Nifty. This is followed by the 22,200 and 22,300 strikes, with 62.53 lakh and 60.22 lakh contracts, respectively. The maximum Put writing, indicating traders betting on the price not falling below a certain level, was placed at the 21,600 strike, which saw an addition of 25.96 lakh contracts. The 21,950 and 22,000 strikes also experienced significant Put writing, adding 24.99 lakh and 6.62 lakh contracts, respectively. The maximum Put unwinding, suggesting traders closing out their bullish positions, was seen at the 21,500 strike, which shed 45.77 lakh contracts.
The Bank Nifty options data reveals that the 49,000 strike holds the maximum Call open interest, with 16.21 lakh contracts, potentially acting as a key resistance level. This is followed by the 50,000 and 48,500 strikes, with 14.84 lakh and 11.91 lakh contracts, respectively. The maximum Call writing was visible at the 48,500 strike, with the addition of 2.5 lakh contracts. The 49,500 and 48,300 strikes also saw significant Call writing, adding 1.57 lakh and 1.03 lakh contracts, respectively. The maximum Call unwinding was observed at the 47,400 strike, which shed 2,730 contracts. On the Put side, the 48,000 strike has the maximum Put open interest, with 13.22 lakh contracts, potentially serving as a key support level. This is followed by the 47,000 and 49,000 strikes, with 10.92 lakh and 8.48 lakh contracts, respectively. The maximum Put writing was observed at the 48,300 strike, which added 49,440 contracts. The 47,400 and 48,200 strikes also experienced significant Put writing, adding 46,260 and 42,630 contracts, respectively. The maximum Put unwinding was seen at the 49,500 strike, which shed 31,605 contracts. The article also mentions the Put-Call Ratio (PCR) for the Nifty, which fell to 0.91 on March 10, compared to 1.08 in the previous session. A decreasing PCR, especially below 0.7, typically indicates a bearish sentiment in the market. Furthermore, the India VIX, a measure of market volatility, jumped 3.82 percent to 13.99, the highest closing level since February 24, suggesting increased market uncertainty and discomfort for bullish investors.
The article provides a snapshot of market activity based on long and short positions. A long build-up was observed in 13 stocks, indicating increasing bullish sentiment, while a long unwinding occurred in 73 stocks, suggesting a decrease in bullish sentiment. A short build-up was seen in 124 stocks, reflecting increasing bearish sentiment, and short-covering was observed in 11 stocks, indicating a decrease in bearish sentiment. The article also highlights stocks with high delivery trades, reflecting investment interest as opposed to trading. Finally, it lists stocks under the F&O (Futures and Options) ban, including BSE, Hindustan Copper, and Manappuram Finance. Securities are placed under the F&O ban when their derivative contracts exceed 95 percent of the market-wide position limit. The article concludes with a disclaimer stating that the views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. It advises users to consult with certified experts before making any investment decisions. A disclosure also mentions that Moneycontrol is part of the Network18 group, which is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary. Overall, the article provides a comprehensive overview of the market setup for March 11, highlighting key levels, options data, and market sentiment indicators for both the Nifty 50 and Bank Nifty indices, along with data on stock-specific activity.
Source: Trade setup for March 11: Top 15 things to know before the opening bell