Nifty Faces Volatile Session on F&O Expiry Day
The Nifty 50 index is experiencing its fifth consecutive month of losses, marking the longest losing streak in nearly three decades. Today, February 27, 2025, is the monthly F&O expiry, and market analysts predict a volatile trading session with potential swings in both directions.
Key Technical Levels to Watch
- Support Zone: 22500-22525
- Resistance Range: 22680-22725
Traders are advised to exercise caution, as breaching these levels could lead to significant market moves.
Why is Nifty Facing a Prolonged Losing Streak?
Several factors have contributed to Nifty’s extended downturn:
- Global Economic Uncertainty – Rising bond yields and geopolitical tensions have led to a risk-off sentiment.
- FIIs Selling Pressure – Foreign Institutional Investors (FIIs) have been offloading equities, shifting towards safer assets.
- Weak Domestic Growth Indicators – Slower GDP projections and muted corporate earnings have dampened investor confidence.
- Interest Rate Concerns – The RBI’s stance on inflation and interest rates continues to influence market sentiment.
- Sectoral Weakness – Banking and IT stocks have shown underperformance, dragging the broader index down.
What to Expect on F&O Expiry Day?
- High Volatility – Traders can expect sharp intraday movements, particularly near support and resistance levels.
- Options Writing Impact – With heavy open interest around key strike prices, short-covering or unwinding can influence closing levels.
- Institutional Activity – Watch for FIIs and DIIs positioning, as their trades can dictate end-of-day market moves.
Traders’ Strategy for Expiry Day
- Follow Key Levels – Monitor price action around 22500 and 22700 zones.
- Avoid Overleveraging – High volatility can trigger stop losses quickly.
- Watch for Breakouts – A decisive move above 22725 could trigger fresh buying, while breaking 22500 may lead to a sell-off.
Legal & Market Insights: Case Law on Derivatives Trading
Securities and Exchange Board of India v. Rakhi Trading Pvt. Ltd. (2018)
The Supreme Court ruled that manipulative F&O trades aimed at misleading the market violate SEBI regulations. This case underscores the importance of fair trade practices in derivatives markets.
Satishkumar Gupta v. SEBI (2021)
This case reinforced that F&O traders must adhere to SEBI margin guidelines to prevent market disruptions and maintain transparency.