Market Outlook - F&O - Derivatives Weekly View (August 7): Positive consolidation to continue above 11000 level...
Amijt Gupta, Head - Derivatives, ICICI direct
Positive consolidation to continue above 11000 level
The Nifty recovered from the crucial level of 10800 and is expected to consolidate more above 11000 in the coming week. Monetary policy outcome has happened and the markets are looking for fresh triggers. If global markets continue to trade with a positive bias, similar reactions would be seen in Indian markets also.
FIIs outflows have reduced. Fresh inflows are being seen from them, supporting the markets. The rupee appreciation trend is also going to be helpful.
Bank Nifty: Close above sizeable Call base of 22000 to open upsides
For a couple of sessions, the Bank Nifty continued to trade in a range where a tussle was going on between OTM Call writers and Put writers as 21000 acted as support and 22000 acted as a hurdle.
The August series had started with higher premiums but as the series progressed premiums declined on the back of short formation at 22000. This could be a positive trigger as for past few weeks, major rally was seen on the back of short covering.
Positional Future Recommendation
Long Bajaj Finserv (BAJFI) August future in the range of Rs. 6450-6480. Target: Rs. 6960; Stop Loss: Rs. 6210
Stocks from the financial space are showing early signs of short covering as Bank Nifty has significantly underperformed the broader market. Stocks like Bajaj Finserv have been consolidating in a range in the last one month. Considering the gradual build-up of positions in the stock, we believe it will find fresh momentum in the coming sessions. It is likely to breach its recent highs of Rs. 6700 in the short-term. Continued Put writing also indicates the ongoing positive bias in the stock.