With the derivatives expiry next week, the market is expected to trade volatile with rollover movement in individual sectors and stocks.
Nifty continues to trade in a narrow range of 200 points while midcaps and smallcaps have witnessed a sharp positive momentum following the re-classification of multicap funds.
Nifty Midcap100 is up by 4 percent and Smallcap by 6.5 percent for the week to date.
Among sectors, Nifty IT and Pharma were the outperformers, gaining 6.3 percent and 3.8 percent, respectively, while Bank and FMCG remain flat to negative.
Nifty is near the previous expiry close and crossover of 11,620 levels on the higher side would turn the monthly candle positive for the next up-move.
Any negative news flow from the global front or geopolitical concerns could accelerate the sell-off.
The second wave of the COVID-19 crisis continues to be a concern for India and the world.
With the derivatives expiry next week, we expect the market to trade volatile with rollover movement in individual sectors and stocks.
On the higher side, 11,600 CE strike has the highest OI of 29.2 lakh shares while 11,500 PE strike has an OI of 34.8 lakh shares.
A breakdown below 11,380 would trigger a sharp sell-off in index pivotal.
Here are two buy and one sell call for the next 2-3 weeks:
The stock has made higher bottoms on weekly charts and RSI is cutting upwards from the lower end, confirming our positive outlook.
On the lower side, the stock has witnessed large volumes with positive price pullbacks and we believe the stock will again resume its uptrend.
In case of any negative surprise, prior swing low will continue to work as a key reversal point for the stock.
The stock has bounced above its short and medium-term averages after a sharp decline last week, confirming the uptrend from the current levels.
Stochastic & RSI on weekly chats is also coinciding with our view, as both the indicators are in bullish mode.
In case of a major decline, multi-month support of Rs 1,230 would act as strong support for the stock.
The stock has been witnessing resistance near intermediate highs of the current year in the range of Rs 297-300 over the past few weeks
RSI has reversed from its higher range and we expect it to moderate and weaken from the current levels, confirming the down-move.
A weekly Doji candle near the top after a strong move indicates a breakdown and some profit-booking from current levels.
(The author is Senior Research Analyst at Reliance Securities)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.