NIFTY BANKNIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 20 OCTOBER 2022

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Domestic equity benchmarks ended Wednesday with modest gains, extending gains into the fourth trading session. Oil & Gas, FMCG and Financial Services stocks gained while IT, Metals and PSU Banking stocks fell. The Nifty opened higher, hitting the daily high of 17607 in morning trade. It slipped briefly into negative territory, hitting the daily low of 17472 in late trade. According to the preliminary closing data, the Sensex barometer index rose 146 points to 59,107. The Nifty rose 25 points to 17,512. Over four consecutive sessions, the Sensex is up 3.27% while the Nifty is up 2.93%. Markets closed marginally higher in a volatile session, taking a breather after the recent recovery. After the initial surge, Nifty saw a gradual decline as participants preferred to book some profits from the table and it eventually settled at 17512. Most sectors traded in line with the move, ending flat to marginally in the green. The broader indices also showed a similar trend. Signs point to some consolidation in Nifty and it would be healthy. Meanwhile, the performance of global indices, particularly the US, will remain on the radar. With all sectors contributing to this move, the focus should be more on stock selection while keeping an eye on the prevailing earnings season.

Nifty traded in the 50 to 61.8% range of the Fibonacci constraint; A precise close above 17550 would be important for the next rally and if 17450 is broken then 17300 would act as strong support for the coming days. Open Interest (OI) data shows that on the call side, the highest OI was observed at 17700 strikes, while on the put side, the highest OI was 17300 followed by 17200 strikes. On the upside, Bank Nifty has support at 39900 while resistance is placed at 40900. A significant amount of call writing was also observed in the Bank Nifty Index at 41100. The India VIX is not showing widespread concern as long as it stays below 20. Over the years, the Indian market has outperformed global markets, supporting the idea that foreign investors cannot afford to ignore them if they want world-best returns from India.

 Resistance: 17350, 17450, 17550

Support: 17250, 17150, 17050