HomeMarket NewsTrade Setup for March 20: Nifty 50 looks to stay above 17,000 ahead of FOMC meet this week

Trade Setup for March 20: Nifty 50 looks to stay above 17,000 ahead of FOMC meet this week

Rahul Arora of Nirmal Bang expects the Nifty 50 to trade in a 16,000 - 18,000 range with a downward bias, adding that even at levels of 16,000, stocks may be expensive.

By Hormaz Fatakia  March 20, 2023, 5:23:38 AM IST (Updated)

25 basis points? 50 basis points? or no hike at all? Questions are theories are aplenty as the US Federal Reserve meets this week to determine which way are interest rates headed.

While a Fed meet is not uncommon, this one comes on the back of immense turmoil within the US banking system. The collapse of two regional banks may just prompt the FOMC to slow down on the pace of rate hikes, even as macro data suggests otherwise.

The Nifty 50 has been the bigger underperformer since the crisis began, although it has no connection to the developments across the seven seas. Since the close of March 8, the index has declined over 4 percent, whereas the US benchmarks on Wall Street have dropped between 1-2 percent.

Problem with the Nifty 50 has not been the developments in the US; of course, there is a sentiment impact, but locally, the heavyweights have just not performed. Whether it be the HDFC Twins, Reliance Industries, ITC, or technology names like TCS and Infosys, all have played their part in dragging the index from 17,799 to 16,850 in just seven sessions.

There is no denying that the market has been extremely volatile. The Nifty 50 traded in a 200-point range on Friday and a third of its 114-point gain came from the HDFC twins in the final few minutes of trade after the NCLT approved their merger.

While the FOMC will do what it does, the Nifty 50 would hope for two things this week: One - 17,000 is respected on the downside, which continues to be a psychologically important level, and two - it manages to make an intraday low above the mark of 17,000, which it has failed to do for the last four sessions.

The market for today's session will also react to UBS' $3.2 billion buyout of rival Credit Suisse, in a deal struck over emergency weekend talks and multiple guarantees.

However, Rahul Arora of Nirmal Bang believes that people don't buy the market, they buy stocks. He sees the Nifty 50 to trade in a 16,000 - 18,000 range with a downward bias, adding that even at levels of 16,000, stocks may be expensive.

What do the charts suggest for Dalal Street?

On the weekly charts, the Nifty 50 has formed a long bear candle with a lower shadow, according to Nagaraj Shetti of HDFC Securities. He now sees 16,850 as the latest "bottom" in the lower top, lower bottom sequence of the Nifty 50. Shetti also expects the Nifty 50 to move higher towards the next resistance of 17,300 - 17,350 with immediate support at 16,950.

Rohan Patil of SAMCO Securities does not expect the bounce in the Nifty 50 to last for long as prices may see resistance at higher levels. Only sustained closing above 17,300 - 17,350 can take the index higher to 17,500 or higher, he said. However, on the downside, if the index breaks below 16,850, Patil expects a fall towards 16,450 - 16,400 levels.

The Nifty Bank index has formed a morning star pattern on the daily chart and can see a pullback rally towards 40,000, in case it holds 39,000 on the downside, according to Kunal Shah of LKP Securities. In case the index moves above 40,000, it may even trigger a move higher towards 41,000, he said.

Here are key things to know about the market ahead of the trading session on March 20:
SGX Nifty


On Monday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — declined 117 points or 0.68 percent to 17,045, thereby pointing to a gap-down opening for the market.


Global Markets




Benchmark indices fell on Friday as regional banks resumed their losses. The Dow Jones declined nearly 400 points and even gave up all of the gains for the week.

The S&P 500 declined 1.1 percent but managed weekly gains of nearly 1.5 percent. The Nasdaq, despite Friday's losses, registered weekly gains of 4.41 percent, registering its best week since January 13.

What to expect on Dalal Street

The trend of the index remains weak and the volatility is expected to continue in the near term. The levels of 17,000 will be the first support for the Nifty 50 on the downside; as the put of strike 17,000 has the highest optionality. The levels of 17,500 will be a major hurdle for the index on the upside; as the call of strike 17,500 has substantial Open Interest build up. The Nifty range for the week is expected to be 17,000-17,500, brokerage firm Nirmal Bang wrote in a note.

Osho Krishnan of Angel One also sees 16,900 - 16,850, the recent swing low of the Nifty 50 to be a key support on the downside. He expects any relief in the global markets to provide a catalyst for the market to move higher. "Traders are advised to avoid aggressive bets and look for stock-specific action, while investors could now seize this opportunity by initiating accumulation in good blue-chip companies in a staggered manner," he said.

The Nifty 50 has formed a doji pattern followed by a recovery candle on the daily chart, indicating the possibility of a bullish reversal, according to Rupak De of LKP Securities. He expects the Nifty 50 to move towards 17,500 - 17,600, in case it manages a sustained close above 17,250.

Key Levels To Watch

For this week's options expiry, the 17,200 strike call of the Nifty 50 added 26.2 lakh shares in Open Interest, while the 17,100 call added 20.17 lakh shares. 19.26 lakh shares were also added by the 17,300 call.

On the downside, the 17,100 put added 24.26 lakh shares in Open Interest, followed by the 17,000 put, which added 20.2 lakh shares. The 16,800 put added 17.5 lakh shares, while the 16,900 put added 12.3 lakh shares in Open Interest.

Nifty 50's put-call ratio remains at 0.87 from 0.88 on Thursday. Indiabulls Housing Finance and GNFC remain in the F&O ban.

FII/DII activity



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













































StockCurrent OICMPPrice ChangeOI Change
NALCO4,99,95,00083.151.46%8.87%
Aditya Birla Capital3,50,40,6001553.85%8.84%
Dr Reddy's Laboratories21,88,1254,460.751.42%7.35%
Bajaj Auto11,91,5003816.850.43%6.98%
HDFC AMC32,08,8001,6950.17%6.41%

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













































StockCurrent OICMPPrice ChangeOI Change
Biocon4,19,47,400209-6.34%18.01%
TCS1,06,09,7253,191.95-0.03%8.62%
Marico86,66,400487.95-0.73%7.33%
PFC5,93,96,00156.8-1.48%7.07%
India Cements1,50,39,400189.2-2.30%5.54%

Short Covering (Increase In Price and Decrease In Open Interest)













































StockCurrent OICMPPrice ChangeOI Change
Nestle India2,32,32018,8842.11%-11.07%
Hindalco2,55,41,600397.852.82%-6.69%
JK Cement3,98,2502,829.301.07%-6.68%
Gujarat Gas40,87,500504.251.20%-5.65%
M&M1,39,53,8001,147.550.49%-5.65%