Technical view: Nifty now finds strong support around 8800 which was the earlier resistance & will find resistance around 8940-8968 the previous highs hit in late August 2016.Bank Nifty also finds strong support @ 20500 & will look to retest 20900 the previous top.
Trading ideas (Time period: 1-3 days)
CAIRN (Buy above Rs 295, for target of Rs 305, SL at Rs 290): The stock has been consolidating in a rising channel since mid November 2016 and has finally broken out from the trading channel on daily charts. Our analysis of hourly charts too shows that Cairn has broken-out from a range further accentuating our bullish stance on the stock. Other momentum oscillators also indicate that the current momentum is here to stay.
Derivative strategies (Time period: Till expiry)
Buy PNB February future @ 142-144, Stop loss 139.25 & Target 145.25-145.75.
Derivative Snippets
Markets continue surge higher as the index call option writers run for a cover, massive short covering was witnessed in Nifty 8800 and 9000 strike.
ATM/OTM index put option strikes saw massive short buildup as the highest open interest put base shifts from 8500 to 8800.
FIIs were net sellers in cash market segment to the tune of Rs. 433 crores.
FII’s index future long/short ratio at 2.5x vs 2.9x.
Amar Ambani IIFL