The February futures and options series comes to an end today. After Wednesday's sell-off, the Nifty 50 index is down nearly 350 points for the series. This comes on the back of two consecutive series drops of nearly 300 points.

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For the series so far, the Nifty 50 has declined close to 2 percent. For the same series last year, the index had declined nearly 5 percent.

Wednesday's session saw higher interest rate concerns weigh on sentiments in the market, which broke below key support levels towards the close. The Nifty 50 declined for the fourth day in a row, marking its longest losing streak in five months.

Among the top laggards were index heavyweights like the HDFC twins and Reliance Industries, who were also among the stocks that took the index past the 18,000 mark last week.

Sanjay Dutt of Quantum Securities told CNBC-TV18 that the market sell-off has mostly to do with the way the yields are panning out along with sme bad data coming from the US. However, he sees better days for domestic equities, albeit selectively.

"I can’t probably make a call that you will get 1,000 point Nifty up or not but I think they are select pockets banks like you ask, some of the PSU banks are pricing the worst. They could be a good time to buy a 5 percent here and there now," he said. "I think risk-rewards are favorable to look at some banks, look at some metal stocks, look at some infra plays like L&T etc. We probably would have better time in these select pockets than what we have seen in the last two three months."

What do the charts suggest for Dalal Street?

Ruchit Jain of 5paisa.com believes that the RSIS oscillator on both Nifty 50 and the Nifty Bank index are now in "sell mode" indicating a short-term corrective phase.

However, hourly charts have moved into oversold territory and hence a pullback move cannot be ruled out, according to him. Jain advises avoiding forming short positions at current levels and sees immediate downside support at 17,465 and 17,375, which is close to the Union Budget-day low of 17,356. Resistance on the upside is seen at 17,700-17,800.

The Nifty Bank index has corrected 1,700 points over the last five trading sessions, even closing marginally below the mark of 40,000 on Wednesday for the first time since October last year.

The banking index has also entered oversold territories according to Kunal Shah of LKP Securities. He expects a pullback move in the index towards 40,600 - 40,800, in case it manages to hold the crucial level of 40,000.

Here are key things to know about the market ahead of the trading session on February 23:

SGX Nifty

On Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — increased 17 points or 0.1 percent to 17,574, thereby pointing to a subdued opening for the market.

Global Markets

US markets were mixed on Wednesday after minutes of the most recent Federal Reserve meeting showed that members of the central bank resolved to keep fighting inflation with rate hikes.

The Dow Jones fell nearly 100 points, while the S&P 500 fell 0.16 percent. The Nasdaq composite rose 0.1 percent, outperforming peers.

What to expect on Dalal Street

By closing below the level of 17,604, the Nifty 50 has made a new "lower bottom" on the daily chart, according to Devarsh Vakil of HDFC Securities, who believes that this is a continuation of a bearish trend. On the downside, he sees support for the Nifty 50 at its budget day low of 17,356, while the previous support of 17,719 will act as a resistance on the upside.

Rohan Patil of SAMCO Securities sees the Nifty 50 remaining in a sell-on-rise mode with immediate resistance at 17,800 and near-term supports of 17,400.

Nifty 50's momentum indicator RSI is on the verge of a breakdown, says Rupak De of LKP Securities. His view on the index remains bearish as long as it remains below 18,000, with the potential to slide towards 17,400 or even 17,200.

Key Levels To Track

For today's weekly and monthly F&O expiry, the 17,700 strike call of the Nifty 50 added over 1 crore shares in Open Interest, while the 17,600 call and the 17,800 call added close to 70 lakh shares each.

On the downside, shedding was seen in the 17,800 put (48.2 lakh shares) and the 17,700 put (18.2 lakh shares), while the 17,400 put and the 17,500 put saw Open Interest addition.

Put-call ratio of the Nifty 50 is now at 0.68 from 0.63 on Tuesday.

Vodafone Idea continues to remain in the F&O ban period.

FII/DII Activity

Long Unwinding (Decrease In Price and Open Interest)

First Published:Feb 23, 2023 5:22 AM IST