The Nifty50 remained in the range of 9,800-9,950 during the week and the trend remains positive above 9,800.   The Nifty50 remained in the range of 9,800-9,950 during the week and the trend remains positive above 9,800 which is the highest Put base. The VWAP of the series is placed at 9,760. Hence, even on extended profit booking for this series, 9,760-9,800 holds important support zone.

The highest Call base is placed at 10,000 strikes. However, the Call positions were lower in comparison to Put option since the start of the series.  Before, the recent breakout above 9700, the Call open interest from 9,700 to 10,000 strike was only 33 lakh shares while 9,500 and 9,600 Put strikes had open interest of more than 60 lakh shares.

The 10,000 Call strike now as are moving to the settlement has seen addition and it is holding more than 70 lakh shares. We believe Nifty positive move should continue and the declines towards 9,800 should be utilised to buy in the coming week also.   In the current consolidation, the underperforming sectors have started performing on the back of short covering. This pattern is likely to continue in the coming weeks.   In the case of profit-booking in the outperforming spaces, underperforming stocks can  take the lead. Nifty futures had seen the addition of almost 11 percent in this series.

We believe fresh longs were added from lower levels of Nifty. These positions are getting rolled into next series.

Source: moneycontrol.com