After The Bell: Indices end in the green on FO expiry day, what should investors do on Friday?

Market Outlook

The market rally continued on February 25 on positive global cues, with the Nifty ending the February F&O series near the 15,100-mark. At close, the Sensex was up 257.62 points, or 0.51 percent, at 51,039.31 and the Nifty was up 115.40 points, or 0.77 percent, at 15,097.40.

Except FMCG, other sectoral indices ended in the green with metal index rose 4 percent and energy index added 3 percent. BSE midcap and smallcap indices were up 1 percent each.

On the BSE, metal and oil & gas indices rose over 3 percent, while power and realty indices added more than a percent each.

Here is what experts say investors should do on February 26:

Ajit Mishra, VP-Research, Religare Broking Ltd

Markets extended rebound of February 24 and gained nearly a percent on the F&O expiry day. Upbeat global cues combined with strong traction in banking majors triggered a strong start. However, profit-taking at the higher levels capped upside as the day progressed.

Global cues and upcoming GDP data will dictate the trend. Mostly sectoral indices are trading in tandem with benchmark, however, we feel banking has the potential to help the index inch further higher. Amid all, we feel it’s prudent to wait for further clarity and limit naked leveraged positions.

Deepak Jasani, Head of Retail Research, HDFC Securities

The benchmark indices ended higher for the second straight session on February 25. The Nifty opened gap-up and later remained in a broad range of 15,082-15,170. PSUs continued to outperform, with four state-run companies among the top 10 gainers on the Nifty.

The index rose for the second day with an up-gap but did not close at its intraday highs. In case we see a down-gap opening and the gap is not filled soon, it could mean a near-term top for markets. However, the broader market is in good shape with an advance-decline ratio being hugely positive and BSE Smallcap index touching its all-time high. On upmoves, the Nifty could face resistance at 15,176-15,188 band.

Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services

The Nifty opened gap-up but failed to hold above 15,150 and witnessed a range-bound movement. The February series ended on a positive note, with the index sustaining well above 15,000. It remained consolidative in a broad trading range for the most part of the day and closed near its opening zones, gaining around 110 points. It formed a small-bodied candle on daily scale, with a long upper shadow, which indicates that follow-up is required to attempt the life-time highs.

Since it is the beginning of a new series, the options data is scattered at different strikes. On the options front, Maximum Put OI is at 14,000 followed by 13,500 strike while maximum Call OI is at 16,000 followed by 16,500 strike. The data suggests a trading range between 14,700 and 15,400.

Mazhar Mohammad, Founder & Chief Market Strategist,

Despite a gap-up opening, the bulls appear to have failed to capitalise on the same as the Nifty witnessed intraday profit-booking from the highs of 15,176, which depicted a Shooting Star formation with a relatively long longer upper shadow.

Hence, some intraday weakness can be expected if the Nifty slips below 15,065, though a short-term weakness can be expected on a close below 15,000, which can once again drag the index down into the sideways zone.

A positive stance can be retained as long as the Nifty sustains above 15,000. If the bulls manage to push the index beyond 15,173, then the strength shall expand initially to 15,271, with eventual targets present around life highs present around 15,430. For the time, traders who are long are advised to hold their position with a stop below 15,000 on the closing basis.

Rohit Singre, Senior Technical Analyst, LKP Securities

One more positive session and the Nifty managed to close at 15,093 with gains of nearly 1 percent and formed a gravestone Doji candle on the daily chart. On immediate basis, the index has good support near the 15,000- mark. If it managed to sustain above 15,000, then-current positive move can extend further towards the 15,200-15,250 zone, which are the hurdle zone on the higher side and if it fails to sustain, strong profit-booking can be witnessed.

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