CHANDAN TAPARIA
ANALYST-DERIVATIVES, MOTILAL OSWAL FINANCIAL SERVICES
Where is the Nifty headed this week?
Nifty is stuck in a broader trading range of 21,710- 22,775 for the last 10 weeks, but the major trend is bullish, and every small decline is being brought. In last two weeks it drifted to 21,777 but witnessed decent recovery towards 22,625 zones. It formed a small-bodied high-wave candle with long shadows on a weekly scale, which indicates volatile swings in a narrow trading band. Mechanical indicators are giving mixed cues in daily and weekly scales and require follow-up action to commence the next leg of the rally towards a new lifetime high. Now, till it holds above 22,222, a fresh leg of the rally could be seen towards 22,775 and 23,000; while on the downside, major support exists at 22,222 and 22,000. What should investors do?
India VIX fell 19% last week and is now hovering near 11 zones. Falling volatility with a holding Put-Call Ratio indicate bulls are holding dominance, but lower volatility is not allowing a bigger market rally. Bullish setup is seen in auto, CPSE, metal, power, energy and exchange-related sectors. Stock-wise positive setups are seen in Escorts, Ashok Leyland, BHEL, Canara Bank, Coal India, Colgate, Concor, IRCTC, Dixon, Exide Industries, Godrej Properties, Havells and IDFC.PRITESH MEHTA
EXECUTIVE VICE PRESIDENT, YES SECURITIES Where is the Nifty headed this week?
The index came off the peak on Friday and our customised Top 10 Nifty index is yet to show any signs of reversal, in fact, it is moving sideways atop for last four months, implying strength in index biggies. In such a scenario, Nifty is expected to see consolidation with immediate support around 22,300. Projection on the upside continues to remain open till 23,000. Our customised index breadth is in the neutral zone, too. A positive breakthrough is expected to have follow-through moves.
What should investors do?
Broader markets have made a sharp comeback and continue to outperform the benchmark index. The ratio of both midcap and smallcap indexes is trending higher. With the index unlikely to provide any breakthrough on either side, focus is likely to continue within side counters. Strength is seen even in the ferrous and non-ferrous metals space. We expect momentum to continue in GMDC, Tata Steel and NALCO. Multi-month B/O in the ratio of metals vs Nifty is expected to provide buying opportunities in this space.
SHILPA ROUT
AVP – DERIVATIVES RESEARCH, PRABHUDAS LILLADHER
Where is the Nifty headed this week?
Nifty saw lower rollovers than average. However, the series closed on a strong uptrend. The option chain on monthly expiry reflects 24,000CE and 22,000PE, while the weekly expiry shows 23,500CE and 21,500PE as very aggressive strikes. As long as Nifty holds 22,200, we should see the 22,800, 23,000 and 23,200 zones in this series, and a breach below 22,200 will drag the index towards the 21,700 to 21500 zones.
What should investors do?
Financials, chemicals/fertilizer, capital goods, energy, cement, metals, pharma, and banking, saw very high rollovers, whereas weak rollovers were clearly seen in technology. Stocks with long rolls include Canara Bank, SBI, CONCOR, Chambal Fertilisers, Aarti Industries, MFSL, GAIL, AB Capital, Glenmark, Tata Power, Nalco, SAIL, Zydus Life, India Cements, Ambuja Cements, and Grasim. A Long Straddle is the best play now at 22,500 on monthly expiry. Buy 22,500PE and 22,500CE, with the stoploss to be maintained as per risk appetite.
