Nifty Outlook : Monday, 10th May 2021
Nifty opened gap up above 14,800 but remained consolidative within a broader range of 100 points on Friday. It continued its positive streak for the third consecutive session and was trading above its 50-DMA. The index continued its higher lows formation of the last four sessions. It formed a Doji candle on the daily scale but a bullish candle on weekly the frame, which indicates that declines are being bought into while hurdles are intact at higher zones. Now, it has to hold above 14,750 to witness an up move towards 15,000 -15,050 zones, while on the downside support exists at 14,700 and 14,600 zone.
India VIX fell down by 5.52 per cent from 22.03 to 20.82 level. The fear gauge index needs to hold below 20 zone to again attract a bullish stance. On the Options front, Maximum Put OI stood at 14,000 followed by 13,500 strike, while maximum Call OI was at 15,000 followed by 15,500 strike. Call writing was seen at 15,500 strike, while Put writing was seen at 14,000 and 14,700 strike. Options data suggested a wider trading range in between 14,400 to 15,200 zones, while an immediate trading range of 14,600 to 15,000 zones.
Nifty Bank opened gap up but cascaded down since its opening levels on Friday. Banking stocks have been facing some pressure, as a result the index tested 32,750 zone. It closed flat to positive with a gains of around 80 points, but formed a bearish candle on the daily scale as it closed below its opening level. Now it has to hold above 32,750 zone to witness an up move towards 33,333 and 33,500 zones, while on the downside support exists at 32,500 and 32,250 levels.
NIFTY: BULL CALL SPREAD : +14850 CE – 15000 CE (12th May, 2021)
Buy 1 lot of 14,850 Call @ 107
Sell 1 lot of 15,000 Call @ 45
Net premium paid: 62 points
Keep SL of net premium of 18 points: Risk of 44 points
Keep target of net premium of 145 points: Reward of 83 points
The major trend is positive and it has been forming higher lows on the daily scale
India VIX was sustaining lower with rise in Put Call ratio, suggesting an overall bullish undertone of the market
Put writing was intact at lower strikes, which could provide support at 50-DEMA
By Kishore Narne, MOFSL
USD/INR Status: Short-term trend remains negative
Stop Loss: 74.35
Trade: Short-term trend looks bearish as long as the pair is trading below the resistance level of 74.35. Selling on rallies is advised, targeting lower support at 72.90 level.
EURUSD Status: Short-term trend remains positive
Stop Loss: 1.2030
Trade: The pair is having short-term support at 1.2030 mark and a rally towards higher resistance at 1.2290 looks likely. Buying on dips is advised.
Amit Sajeja, MOFSL