By Sameet Chavan
After an extended weekend, markets opened on a flat note on Monday and then we witnessed some profit booking in the early morning trade to drag the benchmark index under the 17300 mark. However, Nifty managed to recoup a big portion of losses to reclaim 17350 on a closing basis. On the subsequent day, we had a gap-up opening and then Nifty went on to mark fresh record highs in the initial hour of trade. Unfortunately, in absence of a stick to-up obtaining, index consolidated thereafter to conclude the session tad under 17400. During the remaining couple of sessions, the Nifty resumed its upward trajectory but this time it was with immense obtaining momentum to attain new milestones. The weekly expiry panned out with decent gains more than six-tenths of a % to register new highs beyond 17600.
For the last handful of days, Nifty was trapped in a smaller variety and lastly, it managed to locate some momentum. The trend is incredibly sturdy but honestly, the existing move is not providing us comfort at all. We reiterate that when factors begin to look hunky-dory and there are no indicators of correction, industry surprises. Yes, it is tough to predict the precise time, but it is often superior protected than sorry. As of now, we are not advising to brief but at least one can opt for to retain booking earnings on a standard interval and keep light on positions.
One can nonetheless continue with a stock-centric strategy by following strict cease losses since they are nonetheless delivering superior trading possibilities. Now as far as quick levels are concerned, 17500 – 17450 – 17350 are to be seen as important supports. Since we are trading in uncharted territory, it is tough to project the upside levels and therefore, just for understanding, each one hundred points psychological level can be deemed essential points.
The banking index has had a lion’s share in the last two days’ rally as we saw Bank Nifty hastening towards its record highs on Thursday. The Bank Nifty is lastly out of the slumber phase and the way it is shaped up, it should really ideally lead the benchmarks to new highs. But now going back to our current stance, we would absolutely be watchful of all round proceedings in the coming session. If we witness a sustainable breakout beyond 37800 – 38000, we would see continuation of this upward momentum in the banking space. However, if there is no stick to up to Thursday’s spectacular move, the bulls would absolutely be disappointed.
As far as Option information is concerned, we have been witnessing decent writing in 17400 – 17500 puts due to the fact the last couple of days and on Thursday it shifted to 17600 strike. On the flipside, all the dollars strike get in touch with writers ran for shelter as they got threatened by a great rally in the banking space.
(Sameet Chavan is Chief Analyst – Technical and Derivatives, Angel Broking. Views expressed are the author’s personal.)