Market Outlook - F&O - Oct 9, 2020 - Raj Deepak Singh, Head - Derivatives, ICICI direct
Derivatives Weekly View (October 9): Consolidation likely to be seen above 11600...
The Nifty witnessed a remarkable pullback on the back of continuous FII buying and positive global cues. FIIs bought near Rs. 3500 crore during the week. However, in the last one month, FIIs had sold near ~Rs. 2500 crore. It shows the change in stance on part of FIIs, which should be supportive for broader markets in the coming weeks.
Sectorally, buying was seen in technology, cement and pharma space. Better-than-expected results from technology heavyweights helped IT stocks to move towards new highs while short covering was seen in most banking & financial stocks towards the end as the banking index moved closer to its highest Call base of 24000 strike.
Fresh up move expected in Bank Nifty above 24000...
In the current leg of the Nifty, the Bank Nifty performed at par and saw a sharp reversal from bottom. HDFC Bank outperformed along with supportive move from other banks as well. Despite the sharp up move, IVs continued to rise for the week as major indices deviated from their recent range and have been moving higher.
Post the monetary policy outcome, the Bank Nifty managed to move towards 24000 levels along with closure in open interest indicating short covering. We feel a close above 24000 levels would open the gates for higher targets whereas looking at the Put OI data, we feel support for the index should be placed near 23500 levels.
Positional Future Recommendation
Long Marico (MARIND) October future in the range of Rs. 364-367. Target: Rs. 390; Stop Loss: Rs. 349
In the FMCG space, Marico reverted sharply in the current leg of the Nifty compared to other stocks. In the past few months, open interest in the stock has been declining. However, as the new series started, marginal pick-up in OI was seen. Delivery based volume was seen in the stock near Rs. 350, Rs. 360 levels indicating major support. Due to lower IV, option premiums are cheaper, which has attracted OTM Call buying. We feel the stock is well placed to move around Rs. 400 in coming days.