By Ravi Singh
Nifty October futures are currently trading at a 50 point premium. The Nifty is continuing to trade in a range of 24,500-25,000. We have seen a further downfall in the FIIs long ratio which is now at 33%. Furthermore we saw an extended selling by FIIs in the cash segment as they have sold 82500 cr in cash.
Traders should wait for a clear breakout in either direction for any meaningful upside. So if we talk about the Nifty view with no major change in data we feel that it may continue to trade in range with negative bias. Any bounce towards 25,000 levels should be looked for shorting opportunities with stop at 25200. We can expect a positive momentum in the market only if we see a closing above 25,200.
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Talking about the BankNifty we have seen a clear outperformance as compared to the Nifty and we feel that this outperformance may continue in days to come with support of private banking majors like HDFCBANK.
Key Levels To Watch On Bank Nifty
The ratio of BankNifty and Nifty is currently at 2.10 which we feel that it may test 2.15 in next 15 to 20 days. One must maintain a buy on dip approach till the time Index is trading above 51,500. If this momentum persists we can expect the index to test 52,500 and then 53,000 levels in days to come.
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PVT BANKING is a sector to watch, as it shows potential for outperformance in the coming days. On the other hand, it’s advisable to avoid REALTY and FMCG stocks, as these sectors are expected to underperform. Shifting focus to stronger performers like private banks could yield better results amid current market trends.
Strategy – Nifty Short strangle (24th Oct)
Sell 24450 PE at 45
Sell 24950 CE at 36
Spread 80-82 TGT 20 SL 115
(About The Author: Ravi Singh, SVP- Retail Research, Religare Broking)
(Disclaimer: Views, recommendations, and opinions expressed are personal and do not reflect the official position or policy of Financial Express.com.
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