Market Outlook - F&O - Sep 25, 2020 - ICICI Securities

By Raj Deepak Singh, Head - F&O, ICICI direct

Negative bias to prevail till Nifty trades below 11200

The market became extremely volatile last week amid settlement trade while the Nifty ended the series near lows of the month, losing almost 6.5% during the series. However, a sharp recovery on Friday helped the Nifty to end above 11000 as short covering was experienced across sectors after a sharp fall. Going ahead, we expect the Nifty to remain under pressure while highs can be utilised for creating short positions.

The October series has started with just 85 lakh shares, which is one of the lowest open interest in the Nifty historically suggesting long liquidation. Sectorally also, we have seen most of the performer stocks have seen relatively low open interest coming into the October series. On the options front, the Nifty has a major Call base at the 11200 strike, which is likely to remain an immediate hurdle for the coming weekly settlement. We expect the Nifty to trade with a negative bias below these levels.

Hurdle for Bank Nifty between 21000 and 21200

The Bank Nifty ended the September expiry at monthly lows well below its major support of 21000. Private leaders like Kotak Mahindra Bank, Axis Bank and HDFC Bank along with SBI saw extensive profit booking.

Most private banks violated their highest Put base and closed below it. However, on the very first day of the new series, the Bank Nifty moved 2% higher and tested its sizeable Call base of 21000.

Positional Future Recommendation

Short Titan Company (TITIND) October future in the range of Rs. 1123-1127

Target: Rs. 1056
Stop Loss: Rs. 1160

Rationale

After a sharp move towards Rs. 1200, aggressive writing was seen in ATM Calls, which resulted in almost 6% correction from a high for Titan Company. As the new series started, Call writing positions are heavy and no major Put OI writing was seen in the stock. We feel this will keep the stock move in check and the stock could fall towards Rs. 1050 levels in the coming week. The current fall in precious metal like gold would also keep negative sentiments persistent in the stock. Hence, we feel Titan can be shorted with a stop loss of Rs. 1160.

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

Source : Equity Bulls

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