Day trading guide for Monday

NIFTY OUTLOOK

Chandan Taparia, MOFSL:

The Nifty 50 index made a gap-down opening on account of weak global cues, as bulls seemed to have lost strength, and dragged towards the 14,850 levels on Friday. After a volatile weak, the market is now facing a pause in momentum, and has got stuck in a broader trading range. It concluded the day with a loss of around 140 points. It formed a small bearish candle on the daily scale with long shadows on either side, indicating a tussle between the bulls and the bears in the market. It continues its formation of lower highs and lower lows witnessed in the last two sessions. Now, it has to cross and hold above the 15,000 zone to witness an upmove towards 15,150 and 15,250. On the downside, immediate support exists at 14,800, and then 14,600.

Stocks (spot levels)

ET CONTRIBUTORS

DERIVATIVES
NSE’s India VIX moved up 5.84% from 24.15 to 25.16. VIX is turning highly volatile in a broader range of 21.80p-29.64 from the past nine trading sessions. Cooling down in VIX below 21-20 zones is required for a bullish grip. On the options front, the maximum put open interest is at 14,000, followed by 14,500, while the maximum call open interest is at 16,000, followed by 15,000. Call writing is seen at 15,500, and then 15,000, while put writing is seen at 14,000, and then 14,500. Options data suggests a wider trading range between 14,500 and 15,500, while an immediate range within the 14,750-15250 zone.

Bank Nifty made a gap-down opening and remained under pressure throughout the day. Banking stocks are not holding, and as a result, the index concluded the day near 35,200, with a loss of more than 500 points. After forming a bearish candle on the daily scale, it continues its formation of lower highs-lower lows witnessed in the past two sessions. Now, it has to cross and hold above the 35,500 zone to witness a bounce towards 36,000 and 36,250 zones, while on the downside, support exists at 35,000, and then 34,500.

Nifty (weekly)

Bear put spread: +14,900 PE-14,750 PE (Mar 10)

Buy one lot of 14900 put @ 145

Sell one lot of 14750 put @ 90

Net premium paid: 55 points

BEP: 14,845

Maximum risk: 55 points

Maximum reward: 95 points

Rationale

A major trend has taken a pause and profit-booking can be seen. Traders need to protect themselves from the downside. India VIX soared high and is trading at higher zones, not giving comfort to the bulls. The put-call ratio has decreased with call writing at immediate strikes.

Forex technical

Kishore Narne, head-currency & commodities, MOFSL:

USD/INR status: A sideways-to-higher move looks possible in the short term.

CMP: 73.32

Target: 74.10

Stop loss: 72.75

Trade: The short-term trend looks bullish as long as the pair is trading above the support level of 72.75. A buy-on-dips strategy is advised, targeting a higher resistance of 74.10.

EURUSD status: The short-term trend remains negative.

CMP: 1.1910

Target: 1.1780

Stop Loss: 1.2010

Trade: The pair is having short-term resistance near 1.2010, and a downfall towards lower support at 1.1780 looks likely. Selling on rallies is advised.