By Rajesh Palviya
Nifty began final week on a flat notice nevertheless promoting stress all through the week led the index to finish on a weak notice. Nifty closed at 17476 with a lack of 309 factors on a weekly foundation. On the weekly chart the index has fashioned a protracted bearish candle forming decrease High-Low in comparison with the earlier week indicating weak spot at present ranges. The chart sample means that if Nifty crosses and sustains above the 17700 stage it might witness shopping for which might lead the index in direction of 17900-18100 ranges. However, if the index breaks beneath the 17400 stage it might witness promoting which might take the index in direction of 17100-17000. For the week, we anticipate Nifty to commerce within the vary of 17800-17200 with blended bias. The weekly power indicator RSI is shifting upwards and is quoting above its reference line indicating optimistic bias.
Derivative Outlook:
Nifty futures closed at 17519 on a unfavorable notice with a 3.46% enhance within the open curiosity indicating Short Build-Up. Nifty Futures closed at a premium of 44 factors in comparison with the day prior to this premium of 46 factors. India VIX index is at 17.78 v/s 18.16. Nifty ATM name choice IV is at the moment 12.49 whereas Nifty ATM Put choice IV is quoting at 14.82. Index choices PCR is at 0.72 v/s 0.75 and F&O Total PCR is at 0.82. Nifty Put choices OI distribution exhibits that 17300 has highest OI focus adopted by 17700 & 17500 which can act as assist for present expiry. Nifty Call strike 18000 adopted by 17900 witnessed important OI focus and should act as resistance for present expiry.
Bank Nifty outlook
Bank Nifty began the week on a flat notice and remained in a slim vary (38000-37200) all through the week, indicating lack of power on both facet. Bank Nifty closed at 37463 with a lack of 289 factors on a weekly foundation . On the weekly chart the index has fashioned a “Doji” candlestick formation indicating indecisiveness amongst market members relating to the course. The chart sample means that if Bank Nifty crosses and sustains above 38000 stage it might witness shopping for which might lead the index in direction of 38500-39200 ranges. However if the index breaks beneath 37100 stage it might witness promoting which might take the index in direction of 37000-36400 . Bank Nifty is buying and selling above 20, 50, and 100 day SMA’s which signifies optimistic bias within the quick to medium time period .For the week, we anticipate Bank Nifty to commerce within the vary of 38500-36500 with blended bias.
Derivative Outlook :
BankNifty closed at 37576 on unfavorable notice with 8.17% enhance in open curiosity indicating Short Build Up. BankNifty Futures closed at a premium of 113 factors in comparison with the day prior to this low cost of seven factors. BankNifty Put choices OI distribution exhibits that 37500 has highest OI focus adopted by 37000 & 36500 which can act as assist for present expiry. BankNifty Call strike 38000 adopted by 37500 witnessed important OI focus and should act as resistance for present expiry.
Sectors and Stocks for this week :
We anticipate Sugar, Fertilisers, Chemical, Cement and FMCG sectors might present some shopping for curiosity within the coming weeks whereas IT, Banking and Automobiles might witness some promoting stress.
Strategy for Coming Week :
After a Long vacation weekend, the markets are prone to make a robust transfer in both of the instructions and to make the most of the identical we’re suggesting a market-neutral technique referred to as Long Straddle for weekly expiry at 21st April 2022. This technique includes shopping for of (ATM) CALL & PUT one lot every of 17,500 strike having premium of 139 & 137 respectively garnering in complete premium outflow of Rs 13,800.As it’s a debit unfold, from revenue perspective this technique can generate theoretically limitless revenue whereas the loss is restricted to complete premium paid if Nifty closes precisely on the Long strikes i.e 17,500 on expiry; nevertheless as soon as Nifty breaches the higher breakeven stage of 17,776 or the decrease breakeven stage of 17,224 and sustains on both facet then the revenue could be limitless. It’s advisable to take care of a mix premium (i.e add premium of name + put collectively) cease lack of 100-120 factors in order that if Nifty doesn’t make a robust transfer then losses could be curtailed by following the above talked about cease loss or else as per threat urge for food may even maintain until expiry. The technique will generate income as soon as Nifty breaches the vary of 17,776 on upside or 17,224 on decrease facet on the expiry and likewise closes above or beneath the break even factors.
(Rajesh Palviya, VP – Research (Head Technical & Derivatives), Axis Securities. Views expressed are the creator’s personal.)
Source: www.financialexpress.com”