By Ravi Singh
The market remained largely flat throughout the previous week, ultimately closing with a gain of approximately 1%. The outlook for the Nifty this week is negative, with an immediate support at 23,500. A breach of this level could push the index down to 23,150. Traders are advised against taking long positions unless the index closes above 24000. Overall, the sentiment remains bearish. In the derivatives market, substantial open interest is seen in the Nifty weekly contracts, with roughly 9.3 million positions at the 24,000-call option and about 4.6 million positions at the 23,000 put option. For the upcoming week, the key data points, such as PMI figures for India, the US, and China, along with US jobless claims, will be crucial in guiding market sentiment. From a liquidity perspective, FIIs have been net sellers in the cash market, offloading a total of ₹11,439 crore in December.
The Bank Nifty ended the week flat. Bank nifty outlook is also negative for this week with 50200 as strong support. In the derivatives market, there is significant open interest in the Bank nifty monthly contracts, with approximately 1.3 million positions held at the 52,000-call option and around 0.8 million positions at the 51,500 put option. This indicates notable activity and interest at these key strike prices for the upcoming expiry.
Key Levels
For the Nifty, the outlook remains negative as long as the index trades below the 23,800 marks, and no new long positions are recommended. We expect a significant resistance zone between 23,700 and 23,900, while strong support is likely to be found between 23,350 and 23,200. For this week, the broader range for the Nifty is expected to be between 23,200 and 23,900.
For the Bank Nifty, we anticipate strong support in the range of 50,200 to 49,800, with resistance likely around the 51,500 to 51,800 levels for further upward movement. The index is expected to trade within a broader range of 49,800 to 52,000 this week.
STRATEGY FOR THE WEEK:
BUY NIFTY 02 JAN PUT 23500 @ 88
SELL FINNIFTY 02 JAN PUT 23300 @ 36
SPREAD 52 SL 10 TGT 100/125
(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.
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