Options data indicates an immediate trading range of 11,000-11,400

The current panic may continue for few more days due to margin calls triggered post heavy sell-off of Friday, says Shabbir Kayyumi of Narnolia Financial Advisors. The correction in stocks that started with rising oil prices and a falling rupee was accelerated by rising bond yield and now credit default issue is creating selling climax in the market.

India VIX is trading at the highest level of the week around 15.36 and gained almost 10 percent on September 21, which along with fall of prices, implies higher volatility in the market with a bearish bias. Although Nifty bounced back to its 5-DMA (11,309) on the day, it closed below it, around 11,143 marks, which suggests weakness in the benchmark index in the short term.

Strong indicator 100 DMA is around 11,025 mark, decisive closing below it will take the index towards 200-DMA, which is trading around 10,740 levels. However, a fall should halt around the 10,700 levels, where the previous swing high/low and the strong support trend lines confluence zone exists.

Looking at the Open Interest (OI) front, the highest in Put is seen around 11,000 strikes, followed by 11,100 strikes whereas maximum OI in Call is around 11,500 levels, followed by 11,400. Moreover, options data indicates an immediate trading range between 11,000 and 11,400 marks.

For Nifty, we expect strong support to emerge from 100 DMA at 11,025 and 200 DMA at 10,740. Although, the current panic may continue for few more days due to margin calls triggered post heavy sell-off on September 21. On the other side, a lower time frame downward sloping trend line breakout will be above 11,320 levels, which indicates the Nifty’s close above 11,320 levels will lead the rally towards 11,550/11,600.

Tata Global | Buy above Rs 240 | Target: Rs 275 | Stop Loss: Rs 220 | Upside 15%

Tata Global has given falling wedge breakout after giving short term consolidation on daily charts. From the last few days, it has been trading in its congestion zone and formed a pole and flag pattern on daily charts, which creates buying opportunity in the scrip again. Moreover, sustainability of relative strength index (RSI) above nine days exponential moving average (EMA) giving cues for upside momentum. Strong support is seen near 220 marks. By looking all these factors, trader and investor can buy this scrip above 240 with the stop loss 220 for the target of 275.

Bharti Infratel | Buy Range: Rs 270 - 280 | Target: Rs 317.50 | Stop Loss: Rs 262 | Upside 14%

Bharti Infratel bottomed out near the levels of 263-265 and formed double bottom on daily chart. Breakout is expected above 293 marks from where buying momentum will increase Double Series of long-legged doji and tweezers bottom at lower levels showing upside swing in coming sessions. Moving average convergence and divergence (MACD) histogram started trading in positive territory and positive divergence of RSI adds the conviction of going long for the target of 310 and 325 with stop loss of 262 marks.

Capital Ways Investment Adviser

101-202 SURYODAY BUILDING

2/1 DR RS BHANḌARI MARG , INDORE (MP) 452001

info@capitalways.com

https://www.capitalways.com/