Nifty: Day trading guide for Monday

Analyst: Chandan Taparia, Derivative & Technical Analyst, MOFSL.

The Nifty index opened positive on Friday. After seeing some initial pressure, the index recovered from its intraday low of 15772 levels. It moved in the positive territory and ended with a gain of around 60 points on Friday. Nifty 50 formed a small-bodied bullish candle on the daily scale and also formed its second-highest close ever. Nifty also formed a bullish candle on the weekly scale as it regained from the previous week’s decline. Now, it has to hold above 15800 zones to witness an up move towards 16000 and 16200 levels, while on the downside, support can be seen at 15700 and 15600 levels.

Stocks (spot levels):

Derivatives

India VIX fell sharply by 11.47 per cent from 15.09 to 13.36 levels. The fear gauge failed to move above 16-16.50 levels in the last three weeks and hovered near its lowest levels in the last 17 months. Lower volatility indicates an overall bullish bias but a small bounce in VIX could give some volatile cues to the market.

Since it is the beginning of the new series, options data is scattered at different strikes. On the options front, maximum Put OI is at 15500 followed by 15000 strikes, while maximum Call OI is at 16000 followed by 16500 strikes. Call writing is seen at 16400 and 16500 strikes, while Put writing is seen at 15800 then 15400 strikes. Options data suggests a wider trading range in between 15500 to 16200 zones, while an immediate range in between 15700 to 16000 levels.

Bank Nifty opened positive and moved northwards throughout the day. Banking stocks took the index to 35491 levels and recovered the losses of the last week. It formed a Bullish candle on the daily scale and a Bullish engulfing candle on the weekly frame. Now it has to hold above 35250 levels to move up towards 35750 and 36000 zones, while on the downside, support exists at 35000 and 34750 levels.

Nifty trading strategy

BULL CALL SPREAD: +15850 CE – 16000 CE (01st July 2021)

• BUY 1 LOT OF 15850 CALL at 97
• SELL 1 LOT OF 16000 CALL at 32
• NET PREMIUM PAID: 65 POINTS
• KEEP STOP LOSS OF NET PREMIUM OF 20 POINTS: RISK OF 45 POINTS
• KEEP TARGET OF NET PREMIUM OF 145 POINTS: REWARD OF 80 POINTS

Rationale

• The major trend is positive and declines are being bought into.
• Put writing is intact at immediate strikes which could provide support to the market on any declines.

Forex technical

Analyst: Kishore Narne, Head – Currency & Commodities, MOFSL

USD/INR Status: The pair will remain in a higher range for the short term!

• CMP: 74.22
• Target: 74.75
• Stop Loss: 73.50
• Trade: The pair is likely to continue its positive move and it looks to target 74.75. Strong support is placed at 73.50. Buying around 73.95 will be recommended in the short term.

GBPUSD Status: The pair is likely to remain in negative territory for the short term!

• CMP: 1.39
• Target: 1.3650
• Stop Loss: 1.41
• Trade: The pair is likely to trade with a negative bias in the short-term and selling on the rise around 1.3965 is advised targeting the 1.3650 mark. But our bias will negate if the price breaks above 1.41.

Commodity Calls:

Analyst: Amit Sajeja, VP- Commodities, MOFSL