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Nifty Outlook

Markets inched higher for the second consecutive session and gained over a percent. Buoyancy in the global markets triggered a gap-up start in Nifty which further strengthened with the surge in index majors across sectors. It finally settled at 17,486.95 levels. All sectors contributed to the move wherein banking, energy, auto and FMCG were among the top performers. The broader indices also traded in sync with the move and gained nearly 1 percent each.

The recent rebound in the markets can be largely attributed to the recovery in the global indices while the earnings have been mixed so far. Importantly, Nifty has crossed the hurdle at 17,400 after two weeks of consolidation and we now expect a gradual recovery to the 17,600+ zone. Apart from the global markets, we feel participation of key sectors on a rotational basis would be critical for a sustained up move. Amid all positivity, traders should maintain their focus on overnight risk management.

News

* Polycab reported its Q2FY23 results, its revenue came in at Rs 3,332 Cr up by 10.8% YoY, it reported EBITDA of Rs 428 Cr up by 46.0% and reported a net profit of Rs 271 Cr up by 36.9%.

* L&T reported its Q2FY23 results, its revenue came in at Rs 1,995 Cr up by 24.0% YoY, it reported EBITDA of Rs 422 Cr up by 20.9% and reported a net profit of Rs 283 Cr up by 22.7% YoY.

* Praj Industries reported its Q2FY23 results, its revenue came in at Rs 794 Cr up by 71.6% YoY, it reported EBITDA of Rs 62 Cr up by 67.6% and reported a net profit of Rs 64 Cr.

Derivative Ideas

NIFTY gained 1.01% and closed at 17486.95 on 18th Oct. The index consolidated in a range after opening with a gap. Significant selling in near the money options suggest further consolidation in the range of 17300-17650 with positive bias thus we suggest selling PE as per the given levels

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Strategy:- SELL NIFTY 27 OCT 16800 PE @ 38-40, STOP LOSS 60, TARGET 5.

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