Derivatives Monthly Outlook - Nifty likely to consolidate above positional support of 11300 - ICICI Securities

Looking at the options set-up for the September series, the upward momentum could continue. The Major Call build-up was seen at 12000 strike in the weekly as well as monthly series. Highest Call base has now moved to 12000 Call after11800 Call strike. In the first session of the July series, the data evolved a little wherein 12000 Call on the higher side is becoming a positional resistance with combined (weekly + monthly) OI of over 40 lakh shares.

Open interest in the Nifty has increased marginally compared to last couple of months at inception. The September series is starting with open interest close to 11.7 million shares with almost 3.3 million shares added during the settlement trade. However, the roll spread has not declined. it seems that fresh long attempts were made in the index for the September series as the Nifty continued to trade in positive momentum during the expiry week.

Positional support for Nifty near 11000 and 11300

Looking at the F&O data, the highest Put base is at the 11000 Put strike with almost 35 lakh shares followed by 11500 and 11300 strikes. For a few weeks, the Nifty has consolidated above 11300. Additionally, August series VWAP is near 11280 level. This level is likely to act as a key support in the September series.

We believe the Nifty current uptrend may go into some consolidation in the short-term but should continue to pick up as the series progresses. Lower volatility is likely to keep Nifty declines limited. Profit booking is likely to be used as a buying opportunity as FIIs may try to enter equities on these declines.

Bank Nifty: Has major support at 23000

With all the volatility and choppiness, the Bank Nifty witnessed strong support near 21500. Buying was seen in the expiry week, which helped it to move well above 23500.

The Bank Nifty outperformance started in the second half, triggering huge volatility in the Bank Nifty. In the last couple of sessions, it witnessed short covering, resulting in over 9% returns in the August series. The index posted a five-month high on settlement day. Outperformance was seen in public sector banks as well as select private sector heavyweights. With expectations of short covering in private sector heavyweights as well, further upsides can be expected in the Bank Nifty during the September series.

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

Source : Equity Bulls

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