ICICI Direct Derivatives Weekly View (February 26): Failure to move above 14700 may extend declines towards 14300...

The Nifty lost almost 3% on Friday while it stayed significant volatile in the early part of the week. After finding support near its VWAP level of 14700, the Nifty ended the February series at 15100. However, sharp selling among index heavyweights on Friday led to almost 600 points fall in the index. On the other hand, midcap and small cap stocks outperformed the market and ended the week positive.

The sharp rise in US bond yields unnerved global investors. They turned negative in the last few sessions while domestic institutions have remained sellers. The appreciation in the dollar index from the lows coupled with fund outflows triggered rupee depreciation as the rupee ended at its lowest levels of the year.

Bank Nifty: Weakness may extend towards 33000 levels...

The Bank Nifty started the March series on a dismal note as broad based selling was seen across the equity class. The Bank Nifty started the month with 175 point premium but we feel it is likely to subside in coming days. Private banks saw aggressive cuts as profit booking was experienced after significant outperformance was seen in earlier weeks.

India VIX rose almost 22% and moved towards the level of 28, which is a one-year high. The rupee fell sharply due to the sharp rise in dollar index and deep cuts in equities. This may trigger some negative sentiments and limit the upside in the index.

Positional Future Recommendation

Short Maruti (MARUTI) March future in range of Rs. 6960-6980; Target: Rs. 6510; Stop Loss: Rs. 7170

Rationale

Maruti Suzuki remained under pressure in February and witnessed aggressive Call writing. Major Put OI base last month was at 7000, which is already violated while Call writing activity has moved lower to 7100 and 7200 strikes. Looking at the OI data for the March series and short OI blocks, we feel upsides could be limited in the stock. It is likely to head towards Rs. 6500 in the coming week.

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

Source : Equity Bulls

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