Benchmark equity index Nifty opened positive on Friday, but remained highly volatile within the broader trading range of 13,400 to new lifetime high of 13,579. It remained consolidative in the initial part of the day, followed by a dip of 100 points which was again recovered in the last hour of the trade. It formed a Doji Candle with long lower shadow on daily scale, which indicates absence of momentum at higher zones but declines are being bought nicely. On the weekly front, it continues its northward trend and has been forming higher highs from the last six weeks with a consecutive positive close. Now it has to continue to hold above 13,350 zone to witness an up move towards 13,750, while on the downside key support exists at 13,300.
Stocks (spot levels):
India VIX was up by 0.45 per cent from 18.02 to 18.79. Overall, the lower level of volatility suggests that bulls are holding a tight grip and any small decline could be bought in the market. On the options front, Maximum Put OI stood at 13,000 followed by 12,000, while maximum Call OI was at 13,000 followed by 13,500. Marginal Call writing was seen at 13,700 and 13,800, while Put writing was seen at 13,200 and 13,500. Options data suggested an immediate trading range in between 13,200 and 13,750.
Bank Nifty opened positive and remained within a wider trading range in between 30,300 and 30,800. It remained volatile in the latter part of the trading session and ended the day with gains of around 100 points. It formed a small bullish candle on the daily scale. Continuing its positive setup, it has formed higher highs and higher lows for the last six weeks. Now it has to continue to hold above 30,500 zone to witness an up move towards 31,000-31,200 zone, while on the downside supports will come at at 30,200 and 30,000 levels.
Bull Call Spread: +13,500 CE – 13,650 CE (17th December)
Buy 1 lot of 13,500 Call at 108
Sell 1 lot of 13,650 Call at 47
Net premium paid: 61 points
Keep SL of net premium of 25 points: Risk of 36 points
Keep target of net premium of 140 points: Reward of 79 points
Nifty has been witnessing buying interest at every small decline and heading towards new lifetime high territory.
India VIX has cooled down below 20, which indicates bulls have a tight grip on the market
Put Call Ratio has increased with Put writing at immediate strikes
Kishore Narne, Head – Currency & Commodities, MOFSL
USD/INR Status: The pair is likely to trade with positive bias in the short-term
CMP: 73.87, Target: 74.70, Stop Loss: 73.20
Trade: Sideways-to-positive move will be seen for the pair in the short-term and is likely to target 74.70. Dip buying is advised as long as 73.20 is held as strong support.
USD/JPY Status: The pair is likely to remain in a negative territory
CMP: 103.90, Target: 101.75, Stop Loss: 105.25
Trade: The pair will trade with a negative bias in…
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