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New series (November): Finds new perspective

Commentary:The Nifty ended the October series on a dismal note as it violated its important Put base of 18000 and closed well below its October series VWAP. The Bank Nifty also violated its important support and post the Axis Bank numbers, the Bank Nifty has relatively underperformed the Nifty. Other sectors as well as heavyweights saw a sharp reversal on the October expiry day.

Major Option activity (Weekly):

Major Call OI change in today’s session: 17800 (18.6 lakh), 18000 (19.3 lakh) and 18100 (7.1 lakh).

Major Put OI change in today’s session: 17800 (12.4 lakh) and 17500 (20.1 lakh).

Outlook:The Nifty started the November series with lower open interest base of 1.04 crore shares and has corrected almost 4.95% from recent high, which was not seen for a long time. Couple of days breather could be possible but we feel market participants would take recent correction as buying opportunity. Today, highest Call OI addition is in 17800 strike but the Nifty is trading well above this level, which is a positive sign. In spite of the sharp fall, metals stocks remained resilient whereas most of the cement stocks has reverted from its Put bases. Hence, fresh buying interest should emerge in these stocks whereas we also like PSU banks at the current levels. Last month VWAP was placed near 18100 levels. Hence, the Nifty should head towards this level whereas strong support for the index should be considered at 17500 levels.