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Nifty: Crucial support at 15800 for positive bias to continue…

* The Nifty was finally able to move above 15900 after six weeks of consolidation with the help of technology stocks. Most index heavyweights, particularly top 10 Nifty stocks, stayed range bound and are finding it tough to surpass their highest Call bases. However, stocks like HCL Tech, Tech Mahindra, Wipro, L&T saw a sharp move last week that helped the Nifty to move above 15900

* On the options front, unlike the last couple of weeks, the options activity is relatively low. Considering recent Put writing and Nifty move above 15900, we can expect some positive bias in the Nifty towards 16200. Thus, long positons can be formed only till the Nifty sustains above 15800, which is the major Put base. A move below 15800 may keep the ongoing range bound movement intact

* Sectorally, the recent market move was primarily driven by technology stocks. However, going ahead, we expect banking to remain in focus as banking results will be in focus. Since most banking heavyweights are hovering near their highest Call bases, thus a move above their Call bases will be crucial for banking to perform. We believe 36000 should be a critical level and sustainability above this may open doors for fresh upsides

* While we have witnessed a marginal uptick in volatility index in the penultimate week, it subsided again towards its lows and is currently below 12 levels. A round of uptick in volatility is expected considering results from almost 12 index companies next week

Bank Nifty: Close above 36000 should trigger aggressive short covering

* The Nifty managed to close at a new life-time high whereas the Bank Nifty finally moved above its trading range and moved to a new five-month high. The Bank Nifty has approached its highest Call base of 36000. A close above this level should open more upsides in coming days

* Traders remain cautious to take over leveraged position before the quarterly numbers of HDFC Bank, which is lined up on weekend. However, looking at the overall set up in most private banks, we feel downside should be limited

* For the week, we saw addition of fresh long positions as the index moved towards its Call base of 36000 along with rise in OI. We feel the ongoing momentum should continue in coming days

* In the past five weeks, we saw aggressive Call writing in 36000 strike. Last week also, 7 lakh shares were added in 36000 strike Call, which remains higher for weekly as well as monthly expiry. A close above this level should trigger aggressive closure in this Call writing position. On the downside, major Put OI base for the week is placed at 35000 strike, which remains the strong support area. We advise to remain positive on banking stocks

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