Trade Setup for March 27: Can Nifty continue to hold on to its 50-DMA as expiry nears?

The Nifty just about managed to hold on to 22,000 at the start of this truncated week. The optimist would see it as a recovery from the day's low but the skeptic will see it as the index still continuing to face resistance at the 22,100 mark.

Although the Nifty managed to respect its 50-Day Moving Average (DMA) levels around 21,950 on the downside, which is where it reversed on Tuesday after opening at those levels. In what was expected to be a rangebound, low volume day, the Nifty traded in a 125-point range.

However, the index heavyweights continued to put pressure in what was otherwise a tepid trading session. Reliance Industries, HDFC Bank and ICICI Bank, contributed to nearly two-thirds or 64% of the 92-point drop that the Nifty had on Tuesday. Only L&T and Bajaj Finance could offset some of the losses inflicted upon by the heavyweights.

Despite the broader markets outperforming the benchmarks on Tuesday, the Advance-Decline ratio remained skewed towards the losers as for every one stock that advanced, there were 1.6 stocks that ended with losses.

The consolidation may continue with increased volatility over the next two sessions due to the lack of directional cues both domestically and globally. Once the financial year ends, companies will start reporting their quarterly business updated, followed by earnings reports from the second week of April.

Both foreign and domestic investors were net buyers in the cash market on Tuesday. The numbers through, are skewed due to the block deals seen in stocks like Mankind Pharma, SBI, and others.

The market is currently undergoing a phase of consolidation and the 50-DMA level of 21,950 will be the key support level for the Nifty, said Shrikant Chouhan of Kotak Securities. Till it remains above the 50-DMA, it has the change to move back towards 22,150 - 22,200 levels. However, the selling pressure can accelerate towards 21,800 - 21,750 in case the Nifty fails to hold the 50-DMA, he added.

Rajesh Bhosale of Angel One said that the Nifty is oscillating in the range between its 50-Day Moving Average and its 20-Day Moving Average and only a breakout from that range will dictate the next directional move. Immediate support levels are between 21,900 - 21,850, while 21,700 further down is a major support. Upside resistance is between 22,200 - 22,250 levels.

When ICICI Bank and HDFC Bank are putting pressure, it is only certain that the Nifty Bank will turn out to be an underperformer. The two-day recovery had taken the index closer to 47,000 but it again faced resistance at the 46,800 mark. With Tuesday's drop, the Nifty Bank also gave up some of the gains made during the March F&O series.

Immediate resistance for the Nifty Bank is at 47,000 levels, and a decisive close above that level will trigger a sharp short-covering towards the 48,000 mark. Support on the downside remains at 46,500 - 46,450 mark and a break below that can accelerate the index's fall towards the 46,000 mark.

The 50-DMA placed around levels of 47,000 will continue to act as a formidable resistance for the Nifty Bank, said Om Mehra of SAMCO Securities. Support lies at 46,300 and a break below that trigger further selling pressure towards levels of 46,000, he said.

Nifty 50's futures across series shed 2% in Open Interest on Tuesday. Current rollovers for the Nifty futures are at 49%. They are now trading at a premium of 83.85 points from 68.7 points earlier. On the other hand, Nifty Bank's futures across series added 1.3% in Open Interest on Tuesday. Their current rollovers are at 76%. Nifty 50's Put-Call Ratio is at 1.09 from 1.23 earlier.

SAIL is now the only stock that remains in the F&O ban, while Zee Entertainment, Biocon and Tata Chemicals are out of the ban.

On the Call side, Nifty 50's strikes between 22,000 and 22,300 have seen Open Interest addition for this Thursday's expiry.

On the Put side, the Nifty 50 strikes between 21,700 and 22,000 have seen Open Interest addition for this Thursday's expiry.

CDSL: Standard Chartered Bank - Corporate Banking to sell entire 7.18% stake via a block deal. The floor price is fixed as ₹1,672 per share, which is a 6.3% discount to Tuesday's closing price. The Deal size is said to be $151 million.

Aster DM Healthcare: Olympus Capital Asia Investments is likely to sell up to 9.8% equity via block deal. Offer price is ranging between ₹400 to ₹432 per share and at the lower end, the block deal is said to be worth ₹1,952.8 crore. As of the December quarter, Olympus Capital Asia Investments held a 18.96% stake in the company.

Angel One: Launches QIP to raise funds up to ₹1,500 crore according to sources. Board had approved ₹2,000 crore fund raise on February 22. Floor price of ₹2,555.01 per share is a discount of nearly 7% from Tuesday's closing price. Issue price to be determined on April 2. Funds needed to meet increased working capital requirement, meeting exchange margin needs, scaling up AMC, investing in wealth management subsidiary and to pursue inorganic growth opportunities in the fintech space.

Wockhardt: Capital raising committee approved the issue and allotment of 92.85 lakh equity shares to eligible institutional bidders at an issue price of ₹517 per share, which is a 4.97% discount to the floor price. The company has raised ₹480 crore through the QIP. ICICI Prudential, Madhusudan Kela, Prashant Jain's 3P India Equity Fund among the investors in the QIP.

Cipla: Signs exclusive partnership with Sanofi for distribution of Sanofi India's Central Nervous System product range in India. Under this partnership, Cipla will distribute Sanofi India's six CNS brands in the country.

NOCIL: Board approves incurring capex not exceeding ₹250 crore towards capacity enhancement of the Rubber Chemicals business at Dahej. The existing capacity of 1,15,000 MTA is being utilised around 65%, with another 20% proposed to be added in the next 24-30 months. The capex will largely be funded through internal accruals.

Avenue Supermarts: Opened three new stores at Karimnagar in Telangana, Narsingi in Telangana and at Sachin in Gujarat, taking the total number of stores opened as on date to 357.

SH Kelkar: Board meet on March 29 to consider dividend. Record date for the same has been fixed at April 12, 2024.

Indo Rama Synthetics: Promoter Urmila Lohia acquires 5.35 crore shares of the company from the open market on March 22, 2024.

LIC Housing Finance: Shares de-listed from the Luxembourg Stock Exchange.

Apollo Pipes: Acquires 53.57% share capital & voting rights in Kisan Mouldings for ₹118.4 crore.

Piramal Enterprises: Invests ₹2,000 crore in arm Pirmal Capital & Housing Finance Ltd. The investment will be utilised towards business, general corporate purposes.

Infibeam: UAE-based step-down arm Avenues World FZ-LLC to raise ₹25 million via pre-IPO placement.