Day trading guide for Monday

Motilal Oswal Financial Services

Nifty's Outlook
Analyst: Chandan Taparia, Derivative & Technical Analyst, MOFSL

Nifty50 index opened gap-up and touched its new lifetime high of 15835 in the morning session on Friday. However, the index remained range-bound for most part of the day and closed with gain of 60 points. Nifty formed a Doji candle on the daily scale and a hammer sort of candle on the weekly frame which indicates that declines are being bought into. The benchmark index continued its higher highs-higher lows formation on the weekly scale for the last five weeks. Now, Nifty50 has to hold above 15750 levels to witness an up-move towards 15900 and 16000 levels, while on the downside, support exists at 15650 and 15550 levels.

Stocks (spot levels):

Derivatives outlook
India VIX fell by 5.98 per cent from 15 to 14.10 levels. India VIX is on a downward slope, near its lowest levels in the last 17 months, since February 2020. A falling VIX could continue to push a buy-on-decline strategy in the market. On option front, maximum Put OI is at 15000 followed by 15500 strike price. while maximum Call OI is at 16000 followed by 16100 strike price. Call writing was seen at 15800 and 16100 strikes, while Put writing was seen at 15500, then 15709 level strikes. Option data suggests an immediate trading range between 15500-16000.

Bank Nifty opened positive on Friday, but moved towards south for the first half of the day. The latter part of the day saw a range-bound movement and finally the index closed with loss of around 80 points. Bank Nifty formed a bearish candle on the daily and weekly scale, as supply pressure is seen at higher levels. Now the index has to hold above 35000 levels to witness an up-move towards 35500 and 35750 levels, while on the downside, the support exists at 34750 and 34500 levels.

F&O recommendation:

Nifty Bull-call spread: +15850 CE - 16000 CE (17th June, 2021)

• Buy 1 lot of 15850 call at 67
• Sell 1 lot of 16000 call at 19
• Net premium paid: 48 points

Keep a stop loss of net premium of 14 points: Risk of 34 points.
Keep a target net premium of 145 points: Reward of 97 points.

Rationale:
Major trend is positive for Nifty50 with the formation of higher highs - higher lows, and trading in a new price territory. India VIX is sustaining lower with a rise in Put-Call ratio suggesting an overall bullish undertone of the
market. Put writing is intact at immediate strikes which could provide support.

Forex Technical
Analyst: Kishore Narne, Head–Currency & Commodities, MOFSL

USD/INR Status: Short-term bias is likely to remain positive for the pair.

• CMP: 73.20
• Target: 73.90
• Stop Loss: 72.50

Trade: Short-term bias for the pair is likely to remain positive with a target the 73.90 mark. Buying around 73 will be advised, but our bias will negate if trend breaks and sustains below 72.50.


USDJPY Status: The pair is likely to resume its positive move in short-term!

• CMP: 109.80
• Target: 111.25
• Stop Loss: 108.15

Trade: The current positive move is likely to continue in the upcoming trading sessions and target lies in the 111.25 area. Buying around 109.25 is advised as long as price holds above 108.15.


Commodity Calls:
Analyst: Amit Sajeja, VP- Commodities, MOFSL