Day trading guide for Monday’s market

By Chandan Taparia, Motilal Oswal

Nifty index continued its formation of higher lows for fifth consecutive session and headed towards 11430 zones. It formed a Bullish candle on daily and weekly scale as strong buying interest is visible in most of the sector and heavyweight counters. It closed the week with the decent gains of more than 300 points and holding well above its 50 DMA on daily scale, which clearly shows a strong bulls’ grip in the market. Overall structure of the index is positive with buy on decline strategy as supports are gradually shifting higher. Now it has to continue to hold above 11333 zones to witness a further up move towards 11500 then 11600 zones while on the downside major supports seen at 11200 zones.

Stocks (spot levels) :

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DERIVATIVES

India VIX was down by 11.25% from 20.67 to 18.35 levels and is forming lower top – lower bottoms on daily scale. Cool off in volatility is giving comfort to the bulls to start a fresh up move in the market. On option front, Maximum Put OI is at 10500 followed by 11000 strike, while maximum Call OI is at 11500 followed by 12000 strike. We have seen marginal Call writing in 11400 and 11700 strike while Put writing is seen at 11400 then 11000 strike. Option data suggests a wider trading range in between 11000 to 11800 zones while an immediate trading range in between 11200 to 11600 zones.

Bank Nifty witnessed strong momentum on the last session of the week to extend its move towards 22300 zones. It gained nearly 800 points on last trading session and managed to close above its crucial 50 DEMA. It formed a Big Bullish candle on daily and weekly scale while finally negated the formation of lower lows – lower highs on weekly scale. It relatively outperformed the benchmark index and supports are gradually shifting higher. Now it needs to hold above 22000 zones to witness an up move towards 22500 then 22750 zones while on the downside key support exists at 21750 then 21500 zones.

NIFTY : OPTION STRATEGY : BULL CALL SPREAD : +11400 CE – 11550 CE : (08th October, Weekly expiry)

BUY 1 LOT OF 11400 CALL @ 104

SELL 1 LOT OF 11550 CALL @ 38

NET PREMIUM RECEIVED : 66 POINTS

KEEP SL OF NET PREMIUM OF 31 POINTS : RISK OF 35 POINTS)

KEEP TARGET OF NET PREMIUM OF 136 POINTS : REWARD OF 70 POINTS

RATIONALE:

Nifty has been making higher lows from last few sessions

Put Call Ratio has seen recovery from lower zones with Put writing at immediate strikes could hold the support. Volatility is gradually cooling down which is suggesting some stability. Thus, suggesting Bull Call Spread to get the benefit of bounce back move in the market.

Fx Technical
By Mr. Kishore Narne, Head – Currency & Commodities, MOFSL

USD/INR Status: Sideways-to-lower move is likely to continue in the short-term!

CMP: 73.50, Target: 73.15, Stop Loss: 73.95

Trade: Short-term trend looks sideways-to-negative as long as it holds below 73.90 mark. Selling on rise towards 73.70 is advised targeting support at 73.15-72.90 range.

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EUR-USD Status: Short-term correction looks likely!

CMP: 1.1710, Target: 1.16, Stop Loss: 1.1790

Trade: A corrective move towards support at 1.16 looks possible in the short-term. Selling on rallies towards immediate resistance at 1.1740 is advised.

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Commodity Calls:
By Amit Sajeja, AVP- Commodities, MOFSL

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