Bank Nifty rules at critical level

What are the prospects for the following Feb futures long positions: Bank Nifty purchased at 10914; ICICI Bank at 1,028.6; and BHEL at Rs 2,098 - Rajagopalan Vijay

Bank Nifty: Bank Nifty is hovering around crucial support level despite a strong recovery last week. It finds a support at 10,915, a conclusive below that could weaken it to 10,237 and then to 10,055. Bank Nifty finds an immediate resistance at 11,465.

F&O pointers: The Bank Nifty February futures added fresh short positions on Friday and closed in a discount at 10927 with respect to the spot close of 10,949. However, the March futures closed in premium at 10,952. The rollover of open interest was just 9.6 per cent. Option trading also indicates a negative bias as calls accumulated open interest position.

Strategy: Hold your position with a stop loss at 10914 (Bank Nifty spot on a closing day basis).

ICICI Bank: The outlook remains negative for ICICI Bank. It finds crucial support at Rs 1,007. A fall could drag the banking major to Rs 983 and even to Rs 890. ICICI Bank finds an immediate resistance at 1,117-20.

F&O pointers: The ICICI Bank Feb futures closed at Rs 1,027.85 and the March futures at Rs 1,031.9. The March futures witnessed a rollover of 27 per cent. While current month options indicate negative bias, March series points a neutral view on ICICI Bank.

Strategy: If you are willing to take a risk, hold your position with a stop loss at Rs 1,007. Otherwise exit.

BHEL: The outlook remains neutral for BHEL. It finds an immediate support at Rs 2,068 and a close below could drag it down to Rs 1,926. On the other hand, BHEL finds an immediate resistance at Rs 2,126 and a close above could lift it to Rs 2,229.

F&O pointers: The BHEL Feb futures closed in discount at Rs 2,090.35 and March futures at Rs 2,095.35 with respect to the spot close of Rs 2,102. Option trading suggests BHEL could move in the Rs 2,100-2,200 range.

Strategy: Hold your position with a stop loss at Rs 2,068 (spot price on a closing day basis).

I hold a short position of Nifty futures entered at 5521. Please suggest a strategy. – Arun

Nifty: The outlook remains negative for Nifty futures. Nifty finds a crucial support at 5,426, and a fall below that could push the index to 5,209. Nifty finds an immediate resistance at 5,681 and the next at 5773.

F&O pointers: Nifty Feb futures closed at 5453.65 and March futures at 5476 against the spot index close of 5458.95. The rollover stood just at 19 per cent, most of which are on the short side. Option trading also indicates a negative bias, as calls added more open positions.

Strategy: Hold your position with a tight stop loss at your entry level.

What are the prospects of Unitech 37.5 call Feb 11 expiry that closed at 0.35? – Tallapragada Chakravarthi

Unitech: The outlook remains negative for Unitech. It finds initial support at Rs 30.7 and the next two at Rs 24.6 and Rs 21.65.

F&O pointers: The Unitech Feb futures closed at Rs 34.25 and the March futures at Rs 34.35 over the spot price of Rs 34.2. It saw a healthy rollover of 41 per cent, but most of these are on the short side.

Strategy: Consider exiting your position.

NOTE: The analysis and opinion expressed in this column are based on F&O data available at this point of time and on technical analysis based on past price movements. There is risk of loss in trading.

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