Nifty index opened positive and remained volatile in broader trading range for most part of the session on Friday. It fell in the initial half but recovered well in the second half of the session. Index witnessed a tussle between the bulls and bears but it managed to close positive with gains of 87 points.
It formed a small bodied Bullish Candle on daily scale but got stuck in between 12730 to 12950 zones from the last five trading sessions. However, major weekly structure is positive and continues moving northward with lower pace of buying interest. Now it has to continue to hold above 12750 zones to witness an up move towards 13000 zones while a hold below the same could see weakness towards 12700 then 12650 zones.
India VIX is holding below 20 zones from the last four trading sessions. Volatility has cooled down but needs to continue at lower zones to ride the momentum with higher market base.
On option front, Maximum Put OI is at 12000 followed by 12500 strike while maximum Call OI is at 13000 followed by 13500 strike.
We have seen marginal Call writing in 13200 and 12800 strike while Put writing is seen at 12800 then 12500 strike. Option data suggests a wider trading range in between 12500 to 13000 zones.
Bank Nifty positive but saw selling pressure in the first half of the day. However a smart recovery was seen thereafter and the day ended green with gains of 333 points. It formed a Bullish candle on a daily and weekly scale. It has been consolidating in between 28500 to 29800 zones from the last four trading sessions and requires a follow up action to commence the next leg of the rally. Now it needs to hold above 29000 zones to witness an up move towards 29500 then 29800 level while on the downside support exists at 28750 then 28500 zones.
Bull call spread: +12850 CE – 13000 CE (26th Nov, 2020)
Buy 1 lot of 12850 call @ 116
Sell 1 lot of 13000 call @ 50
Net premium paid: 66 points
Keep SL of net premium of 26 points: risk 40 points Keep target of net premium of 140 points: reward of 74 points
Nifty index has been witnessing buying interest at every small decline and heading towards new life time high territory.
India VIX has cooled down below 20 zones which indicates tight bulls grip in the market
Put Call Ratio has increased with Put writing at immediate strikes
Kishore Narne, Commodities, MOFSL
USD/INR Status: Sideways-to-lower move looks possible in the short-term!
Stop Loss: 74.75
Trade: Short-term trend looks bearish as long as the pair is trading below the resistance of 74.75 level.
Selling on rallies is advised targeting lower support at 73.50 level.
Euro/USD Status: Short-term trend remains positive!
Stop Loss: 1.1750
Trade: The pair is having short-term support near the 1.1750 mark and a rally towards higher resistance at 1.2020 looks likely. Buying on dips is advised.
By Amit Sajeja, MOFSL