Nifty Outlook
The Nifty50 index made a gap-up opening and bulls took it to an all-time high of 15,469 on the first day of the new series. It took support near 15,400 levels and yet again gave the highest daily close at 15,435, up around 100 points for the day. Technically, it formed a small bodied bullish candle on the daily scale and continued its formation of higher highs and higher lows of the last six sessions. Now, it has to hold above the 15,300 zone to witness an upmove towards a life-time high of 15,500 and 15,650 zones. On the downside, support exists at 15,250 and 15,150.
Stocks (spot levels)
ET CONTRIBUTORS
Derivatives
India VIX fell 12.59% from 19.91 to 17.40. The index is at the lowest level in the last 65 weeks, along with its biggest single-day drop since November 25, 2020. A falling VIX is likely to extend the bullish market momentum towards a new high territory. Since it is the beginning of a new series, options data is scattered at different strikes. On the options front, the maximum put open interest is at 14,000, followed by 14,500. The maximum call open interest is at 16,000, followed by 15,500. Call writing is seen at 16,000 and 15,800 while put writing is seen at 15,000, and then 14,500. Options data suggests a broader trading range between 15,000 and 15,800.
Bank Nifty made a gap-up opening and touched a high of 35,436 during the session. Howeve,r it couldn’t hold on to those levels amid volatility. It gave the highest daily close of the last 49 sessions and settled with a marginal gains of around 50 points. The index formed a bearish candle on the daily scale with a long lower shadow but has been forming higher lows for the last three sessions. Now, it has to hold above 35,000 to witness an upmove towards 35,500 and 36,000. On the downside, support exists at 34,750 and 34,500.
Nifty bull-call spread: +15,500 CE – 15,650 CE (June 3, 2021)
Buy 1 log of 15,450 call @ 96
Sell 1 lot of 15,600 call @ 39
Net premium paid: 57 points
Keep a stop loss of net premium of 15 points: Risk of 42 points
Keep a target of net premium of 145 points: Reward of 88 points
Rationale
The major trend is positive along with a breakout. It is forming higher highs and higher lows, and trading in a new price territory. India VIX is sustaining lower with a rise in the put-call ratio, suggesting an overall bullish undertone of the market.
Put writing is intact at lower strikes, which could provide support.
(Chandan Taparia is Derivative & Technical Analyst at MOFSL)
By Kishore Narne
Forex Technical
USD/INR status: The short-term trend remains positive.
CMP: 72.81
Target: 73.50
Stop loss: 72.30
Trade: The short-term trend looks bullish as long as the pair is trading above the support of 72.30 level. Buying on dips is advised targeting higher resistance at 73.50.
ET CONTRIBUTORSEUR-USD status: The short-term trend remains positive.
CMP: 1.2197
Target: 1.2320
Stop loss: 1.2090
Trade: The pair is having short-term support at 1.2090 and a rally towards higher resistance at 1.2320 looks likely. Buying on dips is advised.
ET CONTRIBUTORS(Kishore Narne is Head – Currency & Commodities at MOFSL)
By Amit Sajeja
Commodity Calls
ET CONTRIBUTORS(Amit Sajeja is VP- Commodities at MOFSL)
