Trade Setup for March 10: Bulls eye key support zone at 22,250-22,350

Despite the recent rally, is it premature to believe that the market has fully turned around? Has the Nifty found its bottom, or are we too soon to expect a significant upward movement?

A Strong Week for Nifty: Can It Continue?

The Nifty had its best week in three months, bouncing back after four consecutive weeks of declines. Yet, the excitement still feels subdued, given the long stretch of red on the screen. Bulls are optimistic as the index has recovered nearly 600 points since hitting a low of 21,964 last Tuesday. Many hope this level will act as a new base for further gains.

Positive Triggers for the Market

Among the bullish signals, Reliance Industries has been a standout performer, rising over 6% in the last two sessions and contributing significantly to the Nifty’s recovery. The Nifty closed above the 22,500 mark, and traders are focused on holding this level as the market enters a truncated trading week.

Despite a volatile session on Wall Street on Friday, the US benchmarks ended in the green, offering additional comfort. Other positive factors include recent liquidity measures by the Reserve Bank of India (RBI), cooling oil prices, and a weaker US Dollar Index, which has helped boost metal stocks. Furthermore, Finance Minister Nirmala Sitharaman hinted that GST rates might be reduced further in the future.

On the flip side, foreign institutional selling persists, although at lower levels compared to previous weeks. Domestic institutions have remained net buyers, providing some balance to the market dynamics.

Challenges Ahead: Is the Correction Over?

Despite the recent bounce, Rajesh Bhosale from Angel One cautions that it’s too early to declare the correction over. The market is facing key resistance levels, especially around 22,700-22,800, where a bearish gap is present on the daily chart. The immediate support zone lies between 22,250-22,350.

Nagaraj Shetti of HDFC Securities believes that a decisive move above the 22,750-22,800 range could signal a return of the bulls. However, any dips could find support at 22,250.

Nifty’s Key Levels:

Resistance: 22,700 - 22,800

Support: 22,250 - 22,350

LKP Securities’ Rupak De mentions that there’s significant put writing at 22,300 and call writing at 22,800, suggesting a likely battle between these levels. The immediate resistance range is between 22,700 and 22,750, while support lies at 22,400.

Nifty Bank: Performance and Outlook

The Nifty Bank index remains relatively flat, despite the positive cues for the broader market. It has been trading within a narrow range, showing resistance near the 48,660 mark. Hrishikesh Yedve from Asit C Mehta Investment Intermediates points out that a sustained move above this level could open the doors to a potential rally toward 49,000. The immediate support for Nifty Bank is at 47,840.

F&O Cues: What Do They Indicate?

The Nifty 50 March futures have seen a small dip of 0.3% on Friday, shedding 51,750 shares. The futures are trading at a premium of 97.45 points, slightly higher than the previous day's 76.25 points. Meanwhile, Nifty Bank March futures added 0.3%, indicating some positive momentum.

On the options front, open interest is rising for both calls and puts. Key levels for the Nifty 50 include strikes around 22,600-23,000 on the call side and 22,300-22,600 on the put side. These levels will be closely monitored for signs of direction in the coming sessions.

Stocks to Watch on Monday:

IREDA: The Reserve Bank of India has declined IREDA’s request for equity investment in the Upper Karnali Hydro Electric Power Project in Nepal but will reconsider the matter.

Gensol Engineering: Promoters are selling 2.37% of their stake to unlock liquidity and reinvest it into the business. A board meeting is scheduled for March 13 to consider a QIP and stock split.

IndusInd Bank: The RBI has approved Sumant Kathpalia’s reappointment as MD & CEO until March 2026.

Bodal Chemicals: The government has recommended anti-dumping duties on imports of TCAA from China and Japan, which is expected to boost the company’s topline by ₹50-60 crore in FY25.

Alembic Pharma: USFDA inspection at its Bioequivalence Facility has resulted in one procedural observation.

Lupin: The company launched Rivaroxaban tablets in the US after receiving final approval from the USFDA.

Tata Power: Its arm has signed an MoU with Andhra Pradesh Government for renewable energy projects worth ₹49,000 crore.

Shilpa Medicare: The company received a Form 483 with one observation from the USFDA for its Raichur-based unit.

The market's next move will depend on whether the Nifty can hold key support levels and break through resistance. Investors should stay cautious but keep an eye on the evolving sentiment as we head into next week.