Nifty: Fresh Up Trend Will Emerge Only Above 17950 Levels
Nifty closed the week on a positive note at 17895.2 with a gain of 2% and also formed a bullish candle in the weekly chart, but has formed a Doji pattern in the daily chart signifying equality between bulls and bears. The Nifty reached close to the upper end of the current range of 17950 levels but failed to sustain on Friday. The lower end is placed at 17450 levels. We expect a fresh upward trend to emerge only above 17950 and can take the index to higher levels. Any break below 17450, can drag the index to 17250 levels. Volatility index India VIX is at 15.65 and we expect volatility to remain high as long as VIX trades above 14 levels. Based on weekly option data, the highest PUT OI was seen at 17800 followed by 17700 strikes which will act as a strong support.The highest CALL OI was seen at 18000 strikes followed by 18200 strikes, which will act as a stiff resistance.
Bank Nifty: Break Above 38100 Can Take Index To Higher Levels:
The Bank Nifty closed the week with a gain of 550 points to close at 37775.25. The Bank Nifty face stiff resistance at 38100 levels and witnessed selling pressure at those higher levels. The Index has formed a bearish candlestick pattern in the daily chart but a bullish inside bar pattern in the weekly time frame. If Bank Nifty managed to close above 38100 in the coming weeks, then Index may test the high of 38500/38600. If failed to cross above 38100, then we can expect the index to consolidate between 38000 to 36900 band. Based on weekly options data, the highest PUT OI was seen at 37500 strikes followed by 37000 strikes, which will act as strong support. The highest Call open interest is seen at 38000 strikes followed by 38500 strikes which will act as stiff resistance for the week.
Derivative Activity For The Week :
FIIs have decreased their Long Position by 21855 contracts and have also decreased their Short position by 17504 contracts. Out of total open positions, Long stands @ 59% and Short stands @ 41%. Pro has increased their Long Position by 1586 contracts and has also increased their Short position by 10882 contracts. They are net short by 9296 contracts for the week. Clients have increased their Long Position by 30581 contracts and have also increased their Short position by 17190 contracts. They are net-long by 13391 contracts for the week. Put/Call Ratio on OI (Expiry 28/10/21) : Nifty: 1.56 Vs Last week 1.42
What happened Last Week :
RBI keeps rates on hold to support recovery The Reserve Bank of India’s monetary policy committee kept key interest rates unchanged while retaining an accommodative stance to help revive the economy, which is facing a slowdown due to the coronavirus pandemic. The Repo rate and the reverse repo rate remain unchanged at 4 percent and 3.35 percent, respectively. The RBI lowered its full-year 2021/22 retail inflation projection to 5.3 percent from 5.7 percent, saying the inflation trajectory has turned out to be more favorable than expected. It maintained its full-year economic growth forecast at 9.5%. Moody’s upgrades outlook of nine major Indian corporates to stable Moody’s Investors Service has upgraded the outlook of nine major nonfinancial companies in India to ‘Stable’ from ‘Negative’. These companies are – Tata Consultancy Services Limited (TCS), Infosys Limited (Infosys), Reliance Industries Limited (RIL), Oil and Natural Gas Corporation Ltd. (ONGC), Petronet LNG Limited (PLL), UltraTech Cement Limited (UltraTech), Oil India Limited (OIL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd. (HPCL)