Based on options chain data, maximum OI concentration can be seen in 17,800 & 17,700 strikes of Put option and on the upside 18,200 & 18,000 strikes have witnessed Call writing, Vishal Wagh, Research Head, Bonanza Portfolio – said in an interview with Zeebiz’s Kshitij Anand.

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Q) A roller coaster ride for markets but bears remained in control pushing Nifty and Sensex below crucial support levels. What led to the price action?

A) There is no surprise in witnessing such a correction as India has been a rank outperformer compared to global equities. After seeing such a stellar run there comes a time where indices take pause and revert to their mean.

There are concerns that securities are relatively overvalued in India and globally we are seeing a rise in inflation denting the sentiments of investors, forcing them to book profits in emerging markets and shifting their money to safe-havens.

Q) What are your views on the November F&O series expiry week?

A) Based on options chain data, maximum OI concentration can be seen in 17,800 & 17,700 strikes of Put option, and on the upside 18,200 & 18,000 strikes have witnessed Call writing.

Overall, a broad range of 17700 - 18200 in Nifty is expected in this series.

On the bank nifty front, 38,000 strike has the highest Put OI concentration being a psychological mark followed by 37,500 strikes which will act as supports.

On the upside, 38,500 and 39,000 strikes have seen considerable Call writing which will act as resistance. A short broad range of 37500-39000 is expected in the bank nifty

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Q) Metals, oil & gas, and energy stocks witnessed some selling pressure. What led to the price action?

A) Most of the metal and energy names were trading at their lifetime high levels and incremental flows stopped, forcing investors to book profits.

Metals and energy prices have been on a rise on the back of robust demand recovery and supply constraints along with power and coal shortage.

In the near term, prices of metal are expected to remain soft due to weak numbers from China, be it manufacturing data or home-sales data, also Weak demand from the auto industry due to chip shortage.

Technically speaking, charts also suggested that prices will revert back to its mean on the back of strengthening of the dollar. Dollar and commodities have an inverse relationship.

Q) What are your views on the FIIs selloff on D-Street? Pulled out about Rs 10,000 cr from the cash segment of Indian equity markets so far in November. FIIs pulled nearly Rs 4000 cr on Thursday.

A) The likes of Morgan Stanley have downgraded Indian equities on the back of high valuations. FII has been net seller in April, July and October.

The month of October normally sees FIIs selling due to maturity redemptions, after which, November and December have normally seen inflow.

India is trading at one of the highest valuations ever and its premium to emerging markets is also at a very high level. This has led to some downgrades by global houses.

Q) What should be the strategy of investors for the coming week after a long weekend?

A) Investors are expected to remain stock-specific only till the time a clear trend is not identified. The market is stuck in a range where relative outperformance is seen in the auto sector.

Most of the baskets have seen selling pressure and so traders can play for a bounce-back trade if nifty sustains above 17850 odd levels.

Q) Your top 3-5 trading ideas for the next 3-4 weeks?

A) Here is a list of top trading ideas -

TD Power: Buy| LTP: Rs 403| Stop Loss: Rs 380| Target Rs 465

BSE: Buy| LTP: Rs 1603| Stop Loss: Rs 1500| Target Rs 1760

Canara Bank futures: Sell| LTP Rs 220| Stop Loss Rs 225| Target Rs 208

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)