Nifty Derivative Outlook & Derivative Stock Recommendation

CNX NIFTY utilized initial consolidation to climb higher level in late noon trades, where heavy buying in Realty & Pharma counters supported index to visit 8,668 level from 8,574 mark and finally, closed the session with the rise of 74 points at 8,660 level.

• NSE Cash segment witnessed a turnover of about Rs17,040 crores as compared to Rs15,966 crores earlier.
• Overall market breadth remained positive, where 1069 stocks advanced against 447 declined stocks.
• Mixed trend was witnessed amongst sectoral indices during the day, where CNX REALTY & CNX PHARMA emerged as top gainers with the increase of 6.7% & 5.1% respectively. However, CNX MEDIA emerged as top loser with the decrease of 1.3%.
• Nifty added 73 points to close at 8659.
• OI concentration is seen at 8400 PE and 9000 CE.
• Addition witnessed in 8900CE and 8600PE.
• PCR OI stands at 1.14 compared to 1.12 in the previous trading session.
• Nifty to trade with a resistance of 8730.

CNX NIFTY OUTLOOK

• CNX NIFTY managed to close above its short-term moving averages (i.e. 20-days EMA & 50-days EMA) with a second consecutive rise. As mentioned earlier, our near-term technical view remains positive with probable up move towards 8,800-9,000, however, in case of any adverse action, recent reversal point (placed around 8,270 mark) will work as a strong support level.
• As for the day, support is placed at 8,600 and then at 8,540 levels, while resistance observed at 8,700 and then at 8,790 levels. 
• Put Call Ratio based on Open Interest of Nifty moved up sharply from 0.96 to 0.98 levels. Historical Volatility of Nifty fell down from 19.48 to 19.13 levels but Implied Volatility moved up from 13.53 to 14.43 levels. 

Stocks

• FMCG, Capital goods and Pharma stocks supported Nifty at higher levels.
• In the Pharma space, Cipla has managed to trade in the positive bias. The stock has gained in the previous trading session with an increase in volumes. The RSI also indicates a positive bias. We expect the stock to gain in the next few trading sessions as it has broken its previous resistance of 730.One can accumulate the same at current levels for a near term target of 76.
• Market wide open interest is seen at Rs.192,686cr.
• Amongst sectoral index, CNX Pharma adds fresh long position.
• Dr.Reddy observed build up in long position.

HINDUNILVR has corrected by more than 12% from 983 to 858 levels in last three weeks but now taking support near to the 858 levels and making an early sign of price reversal. In the last series it witnessed built of short position and forming higher top and higher bottom price pattern. It is also witnessing rising volume activity which may support it to move up towards 925 levels. Traders can buy the stock with stop loss of 882 for the upside target of 937 levels.

Buy Between Rs. 896 to 905,Stop Loss 882,Target 937 

JSWSTEEL has failed to move even after the market recovery and also witnessing built up of short position. It is witnessing hurdle at around 930-935 zone and further selling pressure may drag it further to lower levels. One can sell the stock with a stop loss of 940 levels for the downside immediate target of 885 levels.

Sell Between Rs. 917 to 926,Stop Loss 940,Target 885