IGI Logo

Nifty immediate support around 14950 in current uptrend…

* The Nifty remained largely range bound last week amid high intraday volatility. After a gap up opening on Monday, the index consolidated for rest of the week where 15000 acted as support on multiple occasions. Once again the major mover remains the banking space but even the Bank Nifty failed to surpass its Friday’s high and remained largely range bound. Broader markets have significantly outperformed benchmarks and small cap indices gained more than 3% while the rest have seen gains of close to 1%

* Finally, the volatility index witnessed some breather as it consolidated and moved towards 22 levels. As most events are over, we believe a further decline in volatility would be seen in coming sessions and any surge from these levels can be considered as a sign of caution after sharp upsides

* From a data perspective, significant Call option concentration is placed at ATM 15200 strike for coming weekly settlement followed by 15500 strike. Hence, a move above 15200 may take the index towards 15500 towards settlement. On the lower side, immediate and major support for the Nifty remains at the 15000 strike

* Sectorally, insurance and cement stocks have seen strong accumulation along with price performance. On the other hand, some profit booking was seen in FMCG and select auto stocks. Going ahead, we expect midcaps to continue their outperformance over heavyweights

Bank Nifty likely to consolidate in range with 35500 as support

* Post the RBI policy, the Bank Nifty traded in a range with stock specific action. PSU banks performed well whereas no major moves were seen in private banks. Among midcap banks, IDFC First Bank and Federal Bank are likely to do well

* The Bank Nifty started the week on lower option OI base in ATM strike whereas positions are seen in far OTM options indicating possible consolidation in coming days. The 35500 Put hold the maximum OI whereas highest Call base is placed at 37000 strike. We feel the index is likely to consolidate in this range for the week

* Most private bank set-up are positive and stocks like Axis Bank, HDFC Bank and Kotak Bank are likely to find support after 2-3% decline whereas supportive action is expected from other banking stocks

* Last Friday some outperformance was seen in the Bank Nifty compared to the Nifty. However, the current price ratio of Bank Nifty/Nifty is likely to consolidate near 2.38 levels while resistance for the ratio can be seen near 2.4. Due to this, no major outperformance is expected from banking stocks

To Read Complete Report & Disclaimer Click Here

https://secure.icicidirect.com/Content/StaticData/Disclaimer.html

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer