Looking at the options data, open interest concentration in the December series is seen at 10,500 Put and 11,000 Call. This is indicative of the broader range as expected by market participants
Nifty opened the November series around 10,100 levels. After making a low of 10,004 it gained momentum and currently trades around the 10,800 mark. After gains in the early part of the series, significant consolidation was seen mid-series, post which the markets again gained momentum to end the series on a high note with gains of nearly 7 percent.
A sharp correction in crude oil price, coupled with a strong rupee, helped markets form a bottom and reverse the trend. Relief in the NBFC space helped ease concerns helping the market gain.
December series is expected to open on a flat to positive note. First half of the December series coincides with a lot of market impacting domestic and global events.
We expect resistance at 10,900-11,000 levels. It is very critical to conquer the same for the current momentum to continue. Failure could result in a corrective down move.
On the downside, support is seen around the 10,400. We maintain a positive stance for the medium term and expect a correction in the short term. Expect volatility to remain high with any meaningful dip to be treated as a buying opportunity.
As of Wednesday, market-wide rollover was seen at 66 percent with Nifty rollover at 49 percent. High rollover is seen in IT and pharma space, while metals witnessed low rollover. On the momentum front, we expect banking and financial services to outperform.
Looking at the options data, open interest concentration in the December series is seen at 10,500 Put and 11,000 Call. This is indicative of the broader range as expected by market participants. This is in-line with technical parameters which also is indicating resistance at 11,000 levels.
India VIX continues at elevated levels of 17.50. In the recent past, we witnessed 20 levels. A further drop in VIX will help maintaining the current momentum.
The author is Vice President - Derivatives Research at Kotak Securities.Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.