A fresh buying from FII's may lead to resumption of the upward rally: Angel Broking

Views of Mr. Jay Purohit (Technical and Derivative Analyst, Angel Broking):

"Post a flat opening, our market nosedived in initial hour of trade. However, we witnessed a decent recovery from lower levels in the latter half of the session. Eventually, this roller-coaster move in Nifty resulted in one third of a percent loss with negligible change in open interest. It is observed that FIIs have initiated some short positions in index future and they also created some long positions in index put options; however, the quantum is low. At the same time, their existing longs formed in last couple of months are still intact. In index options front, 9300 call options added fresh positions; followed by unwinding in 9500 strike. Thus, highest OI in call option has shifted from 9500 to 9300 strike. On the other hand, we witnessed decent OI build-up in 8900 puts; whereas, covering was seen in 9200 strike. At current juncture, Nifty is hovering around its strong support zone of 9150-9200 and considering the overall activity in derivatives segment, any fresh buying from stronger hands may lead to resumption of the upward rally.

Since the IT giant 'INFY' would be posting its quarterly results tomorrow, we would like to draw trader's attention to few key observations. The stock remained subdued one day ahead of its announcement. Now, if we look at the Implied Volatility (IVs) of the counter, it is slightly on the lower side as compared to its previous quarterly results, indicating traders are not expecting big swings in the counter once the event gets unfold. Also, in recent fall from 1040 to 955, we witnessed some short formation; but the quantum was low. However, mixed positions of last series are still intact in the system. The stock has a strong support zone at 910 - 920 and in case of any corrective move in the vicinity of this zone; traders can initiate a 'Bull Call Spread' (940 and 1000 strike) in the stock."

Source : Equity Bulls

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