By Ravi Singh
The benchmark indices began the week with a negative bias, suggesting a period of consolidation following a marginal gain in the previous week. For the continuation of last week’s momentum, the Nifty needs to firmly close above 24,850. In the derivatives market, the Nifty November weekly options exhibit significant open interest at 25,000 CE and 24,000 PE strikes. In particular, the 25,000 CE has an open interest of about 9.5 million contracts, whereas the 24,000 PE shows roughly 8.3 million contracts. From a liquidity perspective, despite FII selling over the last 7 days, they remain net buyers in the cash segment with inflows exceeding Rs 4,400 crores. This could indicate a note of caution or a shift toward risk-off sentiment in the broader market.
The Bank Nifty opened flat succeeding a minimal gain in the previous week. A key resistance is observed at the 53,700 level. After facing resistance around 53,700, the banking index closed the session on a negative note. Futures open interest remained mostly unchanged. For now, it’s wise to stay cautious and wait for a clearer direction.
Key levels to watch:
For the Nifty, as long as the index trades within the range of 24000-25000 on a spot basis, the bias remains “sideways” and needs to implement a neutral strategy for the coming weekly expiry of December. We expect a significant hurdle in the 24,650-24800 zone, while immediate support is likely around the 24,400 – 24250 levels. Consequently, the trading range for Nifty during the December series is expected to be between 24,000 to 25,000.
For Bank nifty immediate support is likely around the 52800-52500 mark while 53600-53850 would act like a strong hurdle for further upside. We anticipate the index to trade in a broader range of 52,400-54,000 range during the December series.
Strategy for the week: Nifty Short Strangle
Sell Nifty Put 24000 @ 27
Sell Nifty Call 25000 @ 24
Spread 51 Stoploss 88 target 2 (Expiry December 19)
(Disclaimer: Ravi Singh is the Senior Vice President of Retail Research at Religare Broking Limited. Views, recommendations, opinions expressed are personal and do not reflect the official position or policy of Financial Express Online. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproducing this content without permission is prohibited.)
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