ABHILASH PAGARIA
HEAD OF ALTERNATIVE AND QUANTITATIVE RESEARCH, EDELWEISS
Where is the Nifty headed this week?
Nifty options data suggest the likely range of 17,000-17,500 for this week as these strikes hold maximum put and call open interests, respectively. Nifty will continue to oscillate and no sustainable move will occur until we break the above levels on the either side.
What should investors do?
We continue to maintain a super bullish stance on the metal pack and any weakness should be used to build positions in Tata Steel and Jindal Steel & Power. Nifty Bank is a positional sell until FPIs turns bullish on Indian equities. Quick 7-8% gains can be seen in long Tata Elxsi and short Voltas. Whereas from index rebalance perspective, weakness could be seen in IGL, MRF and HDFC AMC.
CHANDAN TAPARIA
DERIVATIVE ANALYST, MOTILAL OSWAL
Where is the Nifty headed this week?
Nifty failed to continue its positive momentum of the last two weeks and remained consolidative between 17,000 and 17,400 for most part of the week. It was witnessing buying interest at the lower end of the trading band but at the same time absence of follow-up buying was clearly visible near 17,300-17,350 zones. Till the index holds above 17,000 zones, declines could be bought for an upside move towards 17,500 and 17,777 zones; while a decisive hold above 17,350 could give more strength and momentum to the current market structure.
What should investors do?
Volatility needs to cool down further to 22-20 zones for market stability and comfort for the bulls. Investor and traders can have a long bias in Indian Hotels, Indigo, PVR, Tata Power, DLF, etc.
SUDEEP SHAH
HEAD-TECHNICAL AND DERIVATIVES RESEARCH, SBI SECURITIES
Where is the Nifty headed this week?
Despite failing to sustain above 17,330-17,350 zone, which is 61.8% Fibonacci retracement of the entire fall from 18,350 to 15,671, the index has been moving in a higher-top higher-bottom formation for the third consecutive week. The overall undertone remains bullish with VIX on a declining trend and improving market breadth. With highest open interest witnessed in 17,000 puts for the forthcoming monthly expiry and 200-day moving average also placed around 17,000, levels of 16,930-16,950 on Nifty will act as a strong support going forward. With significant open interest build up in 17,200 and 17,300 calls, 17,330- 17,350 will act as a resistance, above which the Nifty will continue with its bullish momentum up to 17,470- 17,520. Investors should look to buy the dips until 16,900 levels are breached on the downside on Nifty.
What should investors do?
Positive momentum and outperformance may be witnessed in large-cap and mid-cap stocks from IT, metals, hospitality (unlock theme) as well as oil and gas sector stocks. Attractive risk-reward proposition could be witnessed in stocks from auto, realty and BFSI sectors. Our preferred large-cap picks are Infosys, Bharti Airtel, Reliance and ICICI Bank; while on the mid-cap front, stocks like Mindtree, Tata Power, Indian Hotels and Aurobindo Pharma are amongst the preferred names. For option traders, as we are expecting Index to take support around 16,950- 17,000 and witness buying on dip with a view to capture the upside momentum, we are suggesting a strategy where index traders can initiate a bull call spread which involves buying 17,150 call and selling 17,400 call with a premium cost of 117 points and with a stop loss of 60 points of the premium.
