Market Outlook - Derivatives Weekly View - Dec 11, 2020 - Raj Deepak Singh, Head - F&O, ICICI direct

Derivatives Weekly View (December 11): Momentum expected to continue in broader markets with Nifty support at 13000...

FII flows continued in December as well. After almost Rs. 65000 crore inflows in November, the first 10 sessions of December witnessed inflows of almost Rs. 30000 crore providing a further leg to the market move. During the week, the Nifty gained almost 2% while broader markets also saw continued momentum where both midcap and small cap indices gained almost 1.5% each.

From the options space, immediate option positions are visible at the ATM 13500 Put strike, which is the highest Put base for the coming weekly settlement. Continued writing among Put strikes has pushed PCR levels significantly high, which has increased the risk of some intermediate profit booking in the market. On the higher side, the highest Call base for the week is placed at the 13600 strike followed by 14000 strike. Hence, a further up move should be expected if the Nifty remains above 13500.

Bank Nifty: 1000 points upsides may be seen above 31000...

The Bank Nifty consolidated above 30500 for a major part of the week. Among private banks, HDFC Bank continued to witness profit booking whereas supportive action was seen from other private banks and PSU banks, led by SBI.

Most private banks witnessed support from its sizeable Put base and reverted higher due to which Call writers moved to far OTM strike, which is a positive sign.

Positional Future Recommendation

Long Coal India (COAIND) December future in the range of Rs. 134-136; Target: Rs. 149.5; Stop Loss: Rs. 127

Rationale

In the current leg of the Nifty towards 13500, buying was seen across PSU stocks. Coal India, in particular, has managed to move and sustain above its previous hurdle of Rs. 130, which is a positive sign. The highest Call base for the stock is at the 140 strike above which positions have moved till the 150 strike, which should be the target for the stock. Closure in OI was seen as the stock moved above Rs. 130 levels. We feel the short covering target for the stock is at Rs. 150.

For details, click on the link below: https://www.icicidirect.com/mailimages/Derivatives_view.pdf

Source : Equity Bulls

Keywords