Derivatives strategies - Long Asian Paints Future

Long Asian Paints (ASIPAI) April future in the range of 1805-1815.

Target: 1895;

Stop Loss: 1755

Consumption stocks have shown significant resilience and witnessed buying at lower levels despite negative market sentiments. Asian Paints is one such stock which has moved near its Feb levels while Nifty is still hovering around 9000 levels. The open interest in the stock has declined sharply at inception of the series. Despite gradual build up of positions, the total OI is relatively low ion the stock. We believe long positions should be formed in the stock and it is likely to move towards Feb highs in the coming sessions. The highest Put base for the stock is placed at ATM 1800 strike suggesting expectations of limited downsides.


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Nifty weekly outlook 25 April 2020

Nifty has broadly remained above crucial 8900 levels during the week which shows some resilience exhibited at higher levels. The currency also appreciated a bit towards the close of the week which supported the pullback from 8900 levels. FIIs selling has reduced significantly which has led to this consolidation. Buying is seen in sectors like FMCG and Pharma. The volatility cooled-off further to sub 40 levels which soothed the market sentiments. The start of result season has also led to more stock specific moves within a broader range of Nifty.

Technical Outlook
On the weekly chart, Nifty50 formed a Hanging Man pattern, potentially a bearish candlestick pattern. The index continued to consolidate within the prior week’s range while facing strong resistance at 9,350 level for most part of the week. The recent rally from the low of 7,500 has unfolded in the form of a Rising Wedge pattern, which was clearly evident on the daily timeframe chart, which is a bearish indication. A break below the 9,100 level will confirm the Rising Wedge breakdown and the index may retest the 8,800 level on the downside. Traders can initiate shorts for a break below 9,100 in Nifty50.

Bank Nifty -

Last week Nifty has managed to move and sustain above 9000 levels but under-performance was clearly visible in Bank Nifty which again slipped below 20000 levels. However, Bank Nifty traded in a broader range amidst high volatility. Sharp appreciation was seen in INR from its sizeable Call base of 77 with lower Crude Oil prices triggering positive sentiments for domestic equities. IV's have further contracted from 46 levels and it slipped below 40 levels which is a positive sign going forward. Absence of any major buying by the FII's in the cash segment are likely to keep the index move in check. Call OI blocks are seen in 20000, 20500 and 21000 strikes whereas Put OI base is seen at 18500 strike which remains the key support area for the upsides to continue. Rollover activities are likely to pick up which will trigger some intraday volatility going ahead.



The material on this site is provided for information purpose only. This associated sites do not accept liability for your use of the materials provided.