Chandan Taparia Motilal Oswal Securities
Nifty continued its winning streak for the fifth consecutive week and made a new lifetime high of 11,620 last week. However, it’s witnessed a pause in positive momentum on the daily scale. The overall trend is intact to positive, as it has been trading in a rising channel with the support of a rising trend line.
Now it has to continue to hold above 11,550 zones to witness an up move towards 11,666 then 11,700 zones while on the downside immediate major support is seen at 11,500-11,450 zones.
Nifty has been making higher top-higher bottom on a weekly scale and supports are gradually shifting higher. India VIX fell down by 5.70 percent at 12.41 and lower volatility even after small dips suggests the declines in the market could be bought.
On the options front, maximum Put Open Interest (OI) is at 11,000 and 11,500 strike while maximum Call OI is at 11,600 then 11,500 strike. We have seen Put unwinding at most of the immediate strike price while Call writing is seen at 11,600, 11,650 and 11,750 strikes. Option band signifies an immediate trading range in between 11,500 to 11,650 zones.
Bank Nifty remained under pressure for the third consecutive trading session and has been underperforming the Nifty index. It has recently failed to surpass its multiple hurdles of 28,333 zones and fell towards 27,782 marks. It has got stuck in between 27,700 to 28,400 zones from last thirteen trading sessions and requires a hold above 28,000 and 28,128 zones to extend its move towards 28,333 then a fresh high towards 28,500 zones. While a decisive break below 27,750-27,700 zones cause a decline as it formed a Dark Cloud cover on weekly and an early formation of a Double top on the daily scale.
We are now heading to expiry weak and VWAP and settlement could drive the stock specific move in the market. Nifty is trading higher to its series VWAP, so overall bulls are likely to keep upper hand while intact Call writing at higher strike could limit its upside.
Stock wise we are expecting a positive move in Reliance Industries, TCS, Bajaj Finance, ONGC, Aurobindo Pharma, Glenmark Pharma, TVS Motor, Hindustan Unilever, etc.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Disclaimer: The author is Associate Vice President | Analyst-Derivatives at Motilal Oswal Securities Limited. 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.
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