The Nifty 50 index has now lost close to 1,000 points over the last three F&O series. The index ended the February series with cuts of 380 points, which is the biggest drop since the September series last year.

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Thursday's monthly options expiry session saw the index failing to sustain an intraday recovery yet again, ending lower for the fifth straight day, its longest losing streak since June 2022.

BSE-listed companies have now eroded market capitalisation worth Rs 7 lakh crore in the last five trading sessions, including a loss of Rs 30,000 crore on Thursday.

If historical data is anything to go by, the Nifty 50 index gained over 1,000 points or nearly 7.5 percent in the previous March F&O series.

Aditya Suresh of Macquarie says that they are more cautiously positioned on Indian equities over the next 12 months as they expect some more downside.

"If I think about markets as three pillars, earnings growth foreign flows, domestic flows, excluding the valuation piece, earnings growth, has high numbers still baked in and there is downside here to kind of work through still. Foreign flows means anemic, domestic flows incrementally could be a challenge given the higher rates," he said.

What do the charts suggest for Dalal Street?

Cash segment volumes on the NSE were the lowest since February 2020 monthly expiry, according to Nandish Shah of HDFC Securities. He expects the Nifty to face resistance at levels of 17,720, which happens to be the previous swing low it made on February 13.

Rupak De of LKP Securities believes that Thursday's low of 17,455 will be crucial for the Nifty 50 on the downside as a break below tha level would trigger the resumption of the sell-off. In case that happens, he expects the index to fall towards 17,200 - 17,150. The upper band of the falling channel lies at 17,750 - 17,850.

The Nifty Bank index lost nearly 1,650 points this series, closing right at the mark of 40,000. This was the second consecutive series where the index lost over 1,000 points. It had declined 1,339 points during the January series.

Immediate hurdle for the Nifty Bank, which has formed a long-legged doji candle, is at 40,200, according to Kunal Shah of LKP Securities. Sustaining above those levels may trigger a short-covering move. Downside support is seen at 39,500, below which selling pressure may intensify, according to him.

Here are key things to know about the market ahead of the trading session on February 24:

SGX Nifty

On Friday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — increased 38 points or 0.22 percent to 17,629, thereby pointing to a subdued-to-positive opening for the market.

Global Markets

It was a mildly positive session for benchmark indices on Wall Street with the Dow Jones gaining just over 100 points. The S&P 500 advanced 0.5 percent while the Nasdaq rose 0.7 percent.

Despite Thursday's gains, the indices are headed for weekly losses. The S&P 500 is set for its worst week in two months, while the Dow Jones is headed for a fourth straight weekly drop. Investors will anticipate January data on personal income and consumer spending later this evening.

What to expect on Dalal Street

Ruchit Jain of 5paisa.com advises traders to avoid aggressive trades till the trend changes again. He expects a pullback move on the Nifty 50 due to the oversold hourly set-ups. Immediate support for the index is seen at 17,400 - 17,350. However, he expects any pullback move to experience selling pressure at higher levels. Upside resistance is seen at 17,650 - 17,700.

Jain also advises keeping a close tab on the Nifty Midcap100 index, which has taken support in the 29,850 - 30,000 range thrice in the recent past. A break below those levels may increase the selling pressure in midcap stocks.

The Nifty 50 on the weekly chart has formed a tall red candle which has engulfed its previous two weeks' candles, indicating an upper hand for the bears, according to Rohan Patil of SAMCO Securities. He sees levels of 17,000 - 16,800 on the downside in case the index breaks below levels of 17,300 - 17,200. Only a sustained close above 17,850 can trigger an upward move to 18,150 - 18,200, according to him.

Key Levels To Track

For the weekly options expiry on March 2, the 17,500 strike call of the Nifty 50 has added 32.78 lakh shares in Open Interest, as has the 17,600 call. Open Interest addition of 15.2 lakh shares is seen in the 17,700 call.

On the downside, the 17,500 put has added 29.3 lakh shares in Open Interest, while the 17,600 and 17,400 put options added 10 lakh shares each.

Nifty 50's put-call ratio is now at 0.92 from 0.68 on Wednesday.

FII/DII activity

Long Build-up (Increase In Price and Open Interest)

Short Build-up (Decrease In Price and Increase In Open Interest)

First Published:Feb 24, 2023 5:21 AM IST