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HomeMarketStocksAggressive short build-up in Nifty, avoid longs below 17,750: ICICIdirect

Aggressive short build-up in Nifty, avoid longs below 17,750: ICICIdirect


Technique Positions:

Purchase 1 lot Nifty 25 Jan Future at 17949, Purchase 1 lot 25 Jan 17950 Put at 211.5 & Promote 1 lot 25 Jan 18300 Name at 72.

Rationale

Nifty began the brand new 12 months on a weak footing and did not maintain at 18200 ranges final week. Nifty has given away virtually 400 factors within the final 3 periods of the week as prolonged promoting strain was seen amongst BFSI and Expertise heavyweights. Alternatively, midcap and small cap stocks have proven relative resilience and remained largely sideways outperforming Nifty. Going forward, we consider surpassing the Name bases needs to be essential for any sustainable restoration.

From the information perspective, Nifty has witnessed aggressive quick build-up in the previous few periods as Nifty close to month OI elevated by virtually 15 lakh shares in final week. Furthermore, aggressive Name writing positions are seen at ATM Call strikes with 18000 Name holding greater than 1.2 crore shares for the approaching weekly expiry. Therefore closure amongst these positions needs to be intently watched for any significant restoration.Raj Deepak SinghRaj Deepak Singh

Expertise heavyweights are more likely to stay in focus attributable to their upcoming outcomes this week. From the information entrance,

has seen some aggressive quick build-up in each futures and choices final week. Therefore a transfer above 1500 might set off a brief masking transfer within the inventory. Nevertheless, the remainder of the shares haven’t seen any main futures exercise.

« Again to advice tales



Regardless of latest market weak point, the volatility index hasn’t risen a lot and it’s nonetheless round 15 ranges suggesting expectations of restricted declines. Nevertheless, a transfer beneath latest lows of 17750 might set off a rise in volatility. Therefore longs needs to be averted beneath these ranges.

Retaining the view of rebound out there as it’s buying and selling close to its December lows of 17800. We really feel merchants ought to take protected methods like Collar Spread the place threat will probably be restricted.
(The writer, Raj Deepak Singh, Analyst – F&O, Forex, Commodities, ICICIdirect)



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