By Rajesh Palviya
Nifty started the week on a positive note and traded with extreme volatility on either side for most part of the week, however buying momentum at lower levels pulled index higher to close on a positive note. Nifty closed at 18350 with a gain of 233 points on a weekly basis. On the weekly chart the index has formed a Bullish candle with a lower shadow indicating buying near 18000 level.
Also read: Nifty to challenge all-time high of 18600 this week, hit 18900 in Dec; Bank Nifty may hit 43500; buy Reliance
Bank Nifty Outlook
Bank Nifty started the week on a positive note and traded with extreme volatility on either side throughout the week. Bank Nifty closed at 42137 with a gain of 879 points on a weekly basis. On the weekly chart the index has formed a small Bullish candle forming a higher High-low compared to previous week and has closed above previous week’s high indicating positive bias.
The chart pattern suggests that if Bank Nifty crosses and sustains above 42350 levels it would witness buying which would lead the index towards 42500-42800 levels. However if index breaks below 42000 level it would witness selling which would take the index towards 41750-41500. For the week, we expect Bank Nifty to trade in the range of 42800-41500 with positive bias. The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.
Also read: MCX gold outlook: MCX December gold may rise to Rs 53000 on weakness in US dollar; go long on every dip
Sectors, stocks in focus this week
We expect Banking, Metal, Midcap IT, Auto Ancillary, Capital Goods sector may do well in near-term. One can focus on stocks like HDFC Bank, RBL Bank, ICICI Bank, JSW Steel, Hindalco Industries, LTTS, Coforge, CEAT Ltd, JK Tyre, Amara Raja Battery, L&T, ABB, Bharat Forge, Britannia Industries.
NSE Nifty 50 trading strategy for 24th Nov F&O expiry
The strategy which we are suggesting for this weekly expiry dated 24th November is a Moderately Bullish strategy called as CALL LADDER, which involves buying of one lot of Nifty 18,400 Call @ 179 & selling of one lot of 18,600 Call @ 84 & one lot of 18,800 Call @ 31. The cost of the strategy involves outflow of Rs 3,200/- which is the maximum loss if Nifty trades & closes below 18,450 levels on expiry. On expiry the maximum profit of Rs 6,800 will be attained above 18,600 levels, while strategy will start making loss if Nifty crosses 18,900, hence it’s advisable to exit the strategy in total to avoid unlimited losses above 18,900. Break Even points of the strategy are 18,464 on down side & 18,936 on the upside.
(Rajesh Palviya, Vice President – Research ( Head Technical & Derivatives), Axis Securities. Views expressed are the author’s own.)