trading: Day trading guide for Monday’s market


MOFSL


Nifty Outlook : Monday, 19th October 2020 – Chandan Taparia


Nifty index opened positive and witnessed a rebound of around 100 points towards 11789 levels as it managed to hold previous day’s low of 11661 marks. It formed a Bullish Hammer candle with longer lower shadow on daily scale indicating bulls were able to fight back. Index remained consolidative near to 11750 zones for most part of the session but formed a Bearish candle on weekly scale. Overall price and data setup suggests bounce may be seen but multiple hurdle at higher zones could keep the restricted upside in the market for next few sessions. Now it has to hold above 11750 zones to witness a bounce towards 11850 zones while on the downside support exists at 11666 then 11550 levels.

Stocks (spot levels) :

DERIVATIVES

India VIX was up by 6.2% from 20.38 to 21.64 levels on week on week basis. It formed higher highs from the last three sessions and needs to come down to provide comfort to the bulls. On option front, Maximum Put OI is at 10500 followed by 11000 strike, while maximum Call OI is at 12500 followed by 12000 strike. We have seen Call writing at 11700 then 12100 strike while Put writing is seen at 11700 then 11500 strike. Option data suggests a wider trading range in between 11400 to 12000 zones while an immediate trading range in between 11500 to 12000 zones

Bank Nifty opened positive and witnessed buying interest towards 23650 zones after taking support at 23150-23200 zones. It formed a Bullish candle on daily scale but a Bearish candle on weekly which suggests a range bound bias in broader trading range. Now it has to hold above 23500 zones to witness an up move towards 23750 and 24000 zones while on the downside support exists at 23150 then 23000 zones.

NIFTY : OPTION STRATEGY : BULL CALL SPREAD : +11750 CE – 11850 CE : (22nd October, Weekly expiry)

BUY 1 LOT OF 11750 CALL @ 116

SELL 1 LOT OF 11850 CALL @ 66

NET PREMIUM PAID : 50 POINTS

KEEP SL OF NET PREMIUM OF 20 POINTS : RISK OF 30 POINTS

KEEP TARGET OF NET PREMIUM OF 100 POINTS : REWARD OF 50 POINTS

RATIONALE:

Nifty has formed a Hammer candle on daily scale and supports are intact

Weekly structure is in pressure so upside is capped

Volatility is overall at lower zones which is suggesting market stability

Thus, suggesting Bull Call Spread to get the benefit of positive to range bound move in the market

Fx Technical
By Mr. Kishore Narne, Head – Currency & Commodities, MOFSL

USD/INR Status: The pair is likely to trade with negative bias in the short-term!

CMP: 73.43, Target: 72.50, Stop Loss: 74.00

Trade: Short-term bias for the pair remains weak as long as 74.00 is capped as strong resistance. Selling on rise is advised targeting 72.90 – 72.50 levels.

EUR/USD Status: The pair is likely to trade in a higher range for short-term!

CMP: 1.1715, Target: 1.1875, Stop Loss: 1.1575

Trade: Bias for the pair is likely to remain positive and dip buying is recommended. Support is placed at 1.1575 whereas short-term target is at 1.1875.

Commodity Calls:
By Amit Sajeja, AVP- Commodities, MOFSL





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