Derivatives Weekly View (July 10): Consolidation expected with support at 10600... - ICICI Securities
After reaching the important level of 10800, the Nifty has shown tendency to consolidate as indicated by declining volatility and, thus, reducing option premiums.
India VIX declined below 25 levels after spending the maximum time near 30 in the last series. The OTM Call and Put option premiums have declined, which means the option writers are active and the market may remain range bound next week.
Bank Nifty: Close above 23000 to open gates for higher targets...
Bank Nifty relatively underperformed in this current leg of Nifty from 10200 to 10800 whereas stock specific activity continued in the banking stocks. However, as Nifty paused its pace near 10800 levels focus was turned to BFSI. Short covering rally was seen in private as well as PSU banks along with sharp up-move in NBFC.
The index managed to move above 23000 but Call writers of OTM strike dominated at higher levels. IVs, however, remained muted despite all the volatility with writing seen in OTM strikes.
Positional Future Recommendation
Long NIIT Tech (NIITEC) July future in the range of Rs. 1555-1575. Target: Rs. 1725; Stop Loss: Rs. 1485
In the midcap IT space, NIIT Tech continues to outperform and has moved towards its sizeable Call base of Rs. 1600 along with the rise in OI, indicating long formation. The Dollar index remained muted below 97 whereas the rupee depreciated and moved towards 75.3 levels from 74.6. It has immediate hurdle at 75.50. Closure is seen in ATM strike Call whereas the Call OI has moved higher to 1700 strike indicating more upsides. We feel NIIT Tech is well placed to move towards Rs. 1700 in days to come.