Chandan Taparia, Motilal Oswal
Nifty opened positive on Friday and continued its positive to range-bound move towards 11,940 zone. It managed to hold 11,800 and closed the last day of the week with a gain of around 80 points. The index has continued formation of higher lows for the tenth trading session. The entire base of the market is shifting higher to hit the psychological 12,000 level, a new lifetime high.
Nifty has formed a bullish candle on the daily and weekly scales and gave its highest weekly close in the last 31 weeks since 20th Feb 2020. The index continued its winning streak for the seventh consecutive session on Friday and rallied by more than 1,100 points in the last 11 trading sessions. Now it has to continue to hold above 11,800 level to move towards 12,000, and then 12,200, while on the downside major support exists at around 11,750.
ICICI Bank: Buy
CMP: Rs 401
Target Price: Rs 422
Stop Loss: Rs 391
Bullish crossover with buying interest in most of the banking counters. A decisive hold above 400 zones could take it towards swing high of Rs 422.
India VIX moved up by 11.06 per cent from 18.35 to 20.38 levels, overall lower volatility suggests bullish bias in the market. On option front, maximum Put OI is at 11,500 followed by 11,000 strike, while maximum Call OI is at 12,500 followed by 12,000 strike. We have seen marginal call writing in 12,400 and 12,200 strike while Put writing is seen at 11,500, then 11,800 strike. Option data suggests a wider trading range in between 11,500 and 12,200 zones and an immediate trading range between 11,700 and 12,100.
Favourable cues from RBI policy meet boosted Bank Nifty to head towards 23,900 levels. It formed a strong bullish candle on the daily and weekly scales along with higher highs formation of last six sessions. It closed the day with gains of around 650 points and registered a weekly rise of around 1,600 points. Now it has to continue to hold above 23,500 zones to witness an up move towards 24,200 and then 24,500 zones while on the downside, key support exists at 23,200 and 23,000 zones.
Bull Call Spread: +11900 CE – 12050 CE : (15th October, Weekly expiry)
Nifty has been making higher lows from last ten trading sessions
Put Call Ratio has seen recovery from lower zones with Put writing at immediate strikes
Volatility is overall at lower zones which is suggesting market stability
Thus, suggesting Bull Call Spread to get the benefit of positive move in the market
Amit Sajeja, MOFSL