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Nifty Outlook

Markets witnessed a sharp sell-off on the final day of the week and lost closer to 2%. The Nifty index gradually inched lower after opening with a down gap and settled closer to the lower band of the day’s range to close at 17,530.85 levels. The selling pressure was widespread wherein IT, realty and auto pack were among the top losers. The broader indices also traded in tandem and lost nearly 2.5% each.

The last two days of slide in the index have completely engulfed the gains of last week and a decline below 17,500 in Nifty may result in a further slide. We thus recommend maintaining a cautious stance and limiting positions. Among the sectoral pack, banking is still looking comparatively stronger so participants can continue with “buy on dips” in private banking names.

News

* CSB Bank announces the appointment of Pralay Mondal as new Managing Director and CEO of the bank.

* Happiest Minds Technologies announces commissioning of a 183kWp Solar Power Plant at its Smiles 2 campus in Madivala, Bengaluru.

* Shilpa Medicare gets tentative US FDA nod for Tenofovir Alafenamide tablets, used for treatment of chronic Hepatitis B virus infection.

Derivative Ideas

NIFTY shed 1.94% and closed at 17530.85 on 16th Sep. The index witnessed huge selling pressure on the back of fresh shorts addition in its FUTS. Call writing at 17600 and beyond strikes is also evident. VIX shot up by 8%. We expect markets to remain under pressure and 17800 to act as a strong hurdle for this expiry thus suggesting selling CE as per the given levels.

Strategy:- SELL NIFTY 22 SEP 18000 CE @48-50, STOP LOSS 75, TARGET 5.

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