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Where Nifty should head before Union Budget 2022
Commentary
The Nifty started the new year on an optimistic note and continued its ongoing momentum for the January series with broad based participation. Volatility remained elevated but no major spikes were seen before the Union Budget indicating the ongoing trend should continue. The cherry on the cake is that the rupee appreciated along with a sharp reduction in FIIs’ selling.
Major Option activity (Main expiry):
Major Call OI change in today’s session: 18500 (2.8 lakh), 18600 (1.5 lakh) and 18400 (-2.6 lakh).
Major Put OI change in today’s session: 18000 (4.5 lakh) and 17900 (1.2 lakh).
Outlook:
In the current leg of the rally, the main contribution was from the BFSI space whereas other heavyweights like Reliance Industries, L&T and metals also provided support. For a few days, overall activity in the derivatives segment has increased significantly. Stability in volatility as well as the rupee along with inflows by FIIs in the January series has given confidence to the trader community. For the January expiry, highest Call base is still placed at 18000 levels but the Put base has shifted higher and aggressive writers are present in 18000 strike. We feel 17900-18000 remains the strong support zone whereas, on upsides, the Nifty is well placed to test 18500-18600 levels ahead of the Budget 2022. On the sectoral front, we feel banking and financials should lead whereas action is also expected in select auto, metals and chemical stocks.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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