Market Outlook - Dec 18, 2020 - F&O - By Raj Deepak Singh - Head - Derivatives, ICICI direct

Derivatives Weekly View (December 18): Momentum in broader markets to continue with immediate Nifty support at 13600...

Momentum in broader markets to continue with immediate Nifty support at 13600...

FII flows continued in December as well. After almost Rs. 65000 crore inflows in November, the first half of December witnessed inflows of more than Rs. 46000 crore prompting continued market move. During the week, the Nifty gained almost 1.5% while broader markets also saw continued momentum where both midcap and small cap indices gained almost 2% each.

From the options space, immediate option positions are visible at the ATM 13700 Put strike, which is the highest Put base for the coming weekly settlement. Continued writing among Put strikes has pushed PCR levels significantly high, which has increased the risk of some intermediate profit booking in the market. On the higher side, the highest Call base for the week is at the 14000 strike. Hence, the current positive bias should continue till the Nifty remains above 13600.

Bank Nifty: More upsides expected above 31000 levels...

In the past two weeks, the Bank Nifty has been trading in a range where Call writers are dominating and finding it difficult to move above 31000. However, stock specific activity continued where post the QIP news of PNB, the stock fell almost 22% whereas buying continued in Kotak Mahindra Bank and IndusInd Bank.

We feel that for the coming week focus would be on midcap banking stocks like Federal Bank and IDFC First Bank whereas among heavyweights, Axis Bank is likely to do well as Put writers are active in 600 strike, which is a strong support zone.

Positional Future Recommendation

Long Tata Consultancy Services (TCS) December future in the range of Rs. 2835-2845; Target: Rs. 3015; Stop Loss: Rs. 2749

Rationale

Technology stocks are expected to continue to outperform in the coming week after better results from Accenture. The positive price action already started in the last few sessions and is likely to continue. TCS rose from 2200 to 2850 levels on the back of short covering. It had the highest Call base at 2800 strike while the stock managed to close above this level. Last Friday there was a huge closure in 2800 Call strike while positions have shifted to Rs. 3000 levels, which should be the short-term target.

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

Source : Equity Bulls

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