Day trading guide for Monday


Chandan Taparia, MOFSL


Nifty Outlook for Monday
Nifty opened gap down on Friday and while it remained within a range for the first half of the session, it cascaded thereafter and drifted towards 14,600 levels. The first session of the May series and last session of the April month ended in red with a loss of around 260 points. It negated its formation of higher highs – higher lows of the last five trading sessions. Technically, it formed a Bearish candle on the daily chart but a Bullish candle on the weekly frame with long upper shadow indicating it couldn’t sustain at higher zones. Now, it has to cross 14,700 to witness an up move towards 14,900 and 15,050 zone, while on the downside support exists at 14,400 and 14,250 zones.

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Derivatives

India VIX fell down by 1.17% from 23.30 to 23.02 levels. The fear gauge index needs to hold below 20 zone to again attract a bullish stance. Since, it is the beginning of a new series, Options data is scattered at different strikes. Maximum Put OI stood at 14,000 followed by 13,500, while maximum Call OI was at 15,000 followed by 15,500 strike. Options data suggested a wider trading range in between 14,000 to 15,200 zones.

Bank Nifty opened gap down and moved in the southwards direction throughout the day. Banking stocks faced sustained pressure during the day and the index breached 32,700 and settled the day with a huge loss of around 930 points. It formed a Bearish candle on the daily scale but a Bullish candle along with long upper shadow on the weekly frame. It negated its formation of higher highs of the last seven sessions. Now till it holds below 33,333 zone, weakness could be seen towards 32,500 and 32,150 zones, while resistance can be seen at 33,333 and 33,500 levels.

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Nifty: Bull Call Spread: +14,700 CE – 14,850 CE (6th May, 2021)
Buy 1 lot of 14,700 Call @ 136

Sell 1 lot of 14,850 Call @ 75

Net premium paid: 61 points

Keep SL of net premium of 18 points: Risk of 43 points

Keep target of net premium of 145 points: Reward of 84 points

Rationale:

The major trend is positive and declines are being bought again.

India VIX has cooled down with rise in Put Call Ratio, which indicates overall bullish undertone of the market.

Put writing is intact at lower strikes which could provide support.

Fx Technical
By Kishore Narne, MOFSL
USD/INR status: Positive momentum likely to resume for the pair

CMP: 74.35,

Target: 75.00

Stop Loss: 73.65

Trade: The pair is likely to resume its positive move after the recent fall and it looks to re-test 75.00 mark. Buying is recommended as long as price holds above 73.65.

EUR/USD Status: The pair is likely to trade with a negative bias in the short-term.

CMP: 1.2035,

Target: 1.1870,

Stop Loss: 1.2225

Trade: The current weakness in the pair is likely to extend in the upcoming sessions and is likely to target 1.1870. Selling on the rise is advised as long as 1.2225 is capped as resistance.

Commodity Calls:
By Amit Sajeja, MOFSL

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