Motilal Oswal Financial Services
The Nifty traded rangebound on November 30, but witnessed a strong surge last week. It has been making higher highs-higher lows for the last four trading sessions on a daily scale and formed a strong bullish candle on the weekly scale, which suggests that bulls are retaining a tight grip.
The index completed its 50 percent retracement near 10,880 zones from its down leg of 11,760 to 10,004 levels and requires a hold near to its crucial supply zones. Now, it has to continue to hold above 10,777-10,800 to extend its move towards the psychological 11,000, then 11,176 levels. On the downside, major support is seen at 10,650 levels.
The Nifty ended the November series with decent gains (734 points or 7.25 percent). It registered a biggest expiry-to-expiry gains since March 2016. Nifty futures saw a rollover of 71.23 percent compared to 75.83 percent in last series, while Bank Nifty saw rollovers of 72.17 percent versus previous series rollovers of 78.68 percent.
On the option front, open interest (OI) concentration is scattered at different strikes but an early data set-up suggests a trading range in between 10,700 to 11,000 zones. India VIX remained flattish on a weekly basis. However, it's not cooling down as we are heading towards few major events, including the RBI policy meet and state elections.
Bank Nifty remained in consolidation mode on November 30 but witnessed strong momentum of more than 3 percent last week, with consolidation breakout above 26,350 zones. It formed a bullish candle on the weekly scale, making higher highs for the past five weeks, suggesting strength and positive set-up in the index. Now, it has to hold above its previous breakout of 26,350 on a positional basis and 26,666 zones on immediate trading basis to extend its move towards 27,200, then 27,500 levels.
Volatility is likely to continue ahead of upcoming RBI policy, global cues and polling and results of state elections.
Positive action will be seen in Kotak Mahindra Bank, Bata India, Dr Reddy's Laboratories, Escorts, McDowell Holdings, Tata Consultancy Services (TCS), M&M Financial Services, Bajaj Finance, HDFC Bank etc, while weakness is seen in few public sector banks and oil marketing companies.Disclaimer
: The author is a Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services. 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.