The last three weeks have seen the Nifty 50 gain nearly 700 points. But when one looks at the weekly picture, the index has gained for seven weeks in a row. Since the last week of October when the index began to rally, the Nifty has gained nearly 2,500 points.
Over last Thursday and Friday, the Nifty also received a tremendous leg-up from IT stocks, with the Nifty IT index ending 4.5% higher, adding to Thursday’s 3.5% gains. Courtesy of this two-day surge, the IT index gained 7.2% for the week, marking its best weekly advance in three years.
Subhash Gangadharan of HDFC Securities expects further upside on the Nifty once the index crosses the immediate resistance of 21,492, which is Friday’s high. However, he advises caution for the near term as the 14-day RSI is in overbought territory at 85. “Thus, any short-term corrections can be utilised to buy into quality stocks,” he said.
“With the existing overbought parameters, it is advisable to focus on risk management and keep booking profits at regular intervals,” said Osho Krishnan of Angel One. He further said that downside supports for the Nifty could be seen between 21,300 – 21,200, followed by 21,100.
“The prevailing sentiment appears strongly in favor of the bulls, as indicated by the absence of any reversal signals on the technical charts. Resistance is observed at 21,500, while a potential further rally in the Nifty could occur upon breaching this level. Support is currently positioned at 21,300,” Rupak De of LKP Securities said.
A major part of the Nifty’s outperformance recently has come from the Nifty Bank, which has gained for four weeks in a row. Since mid-November, the index has rallied close to 5,000 points and even closed above the mark of 48,000 on Friday.
Amol Athawale of Kotak Securities believes that the short-term texture of the Nifty Bank is still positive. 47,500 – 47,200 can be crucial support zones, while 48,500 – 48,800 will be an immediate profit booking zone. For traders, buying on dips and selling on rallies will be the ideal strategy.
“The overall market sentiment remains bullish, supported by a strong base at 47,500. Any retracements towards this support level are seen as buying opportunities. The upside potential for the index is projected to reach 50,000, indicating continued optimism among market participants,” said Kunal Shah of LKP Securities.
What Are The F&O Cues Indicating?
Nifty 50’s December futures added 0.3% and 40,350 shares in Open Interest. They are now trading at a premium of 100.45 points from 144.95 points earlier. On the other hand, Nifty Bank’s December futures added 5.1% and 93,045 shares in Open Interest. Nifty 50’s Put-Call Ratio is now at 1.47 from 1.37 earlier.
Indiabulls Housing Finance is out of the F&O Ban list. Manappuram Finance, SAIL, India Cements, Hindustan Copper, Balrampur Chini, Delta Corp, and Zee Entertainment remain in the F&O ban list.
Nifty 50 on the Call side for December 21 expiry:
On the call side, the Nifty 50 strikes between 21,500 and 22,000 have seen Open Interest addition for this Thursday’s expiry.
Strike | OI Change | Premium |
22,000 | 16.12 Lakh Added | 8.35 |
21,550 | 13.83 Lakh Added | 98.55 |
21,600 | 13.04 Lakh Added | 77.3 |
21,500 | 12.27 Lakh Added | 123.45 |
Nifty 50 on the Put side for December 21 expiry:
On the Put side, the Nifty 50 strikes between 21,300 and 21,500 have seen Open Interest addition for this Thursday’s expiry.
Strike | OI Change | Premium |
21,300 | 60.7 Lakh Added | 53.55 |
21,400 | 40.71 Lakh Added | 78.85 |
21,350 | 27.83 Lakh Added | 64.8 |
21,500 | 22.78 Lakh Added | 116.1 |
These stocks added fresh long positions on Friday, meaning an increase in both price and Open Interest:
Stock | Price Change | OI Change |
NALCO | 5.51% | 16.18% |
Oracle Financial | 4.41% | 11.11% |
L&T | 1.71% | 7.14% |
ABB | 0.25% | 6.70% |
BPCL | 0.57% | 6.47% |
These stocks saw a bout of short covering on Friday, meaning an increase in price but decrease in Open Interest:
Stock | Price Change | OI Change |
Dr Reddy’s | 0.25% | -9.49% |
Hindustan Copper | 1.16% | -8.06% |
Berger Paints | 0.79% | -7.65% |
Mphasis | 0.97% | -6.96% |
Hero MotoCorp | 0.36% | -6.88% |
These are the stocks to watch out for ahead of Monday’s trading session:
First Published: Dec 17, 2023 7:42 PM IST
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.