F&O Strategy: Buy Reliance, Amara Raja Energy, Gujarat Gas, Rupak De Suggests as Indian Stock Market Remains Volatile

Stock market today: In the early trading session on Monday, the Nifty 50 and Sensex, the domestic benchmark indices, witnessed a decline. This was due to foreign fund outflows and overall weakness in Asian markets, especially as Japan’s Nikkei index plunged by almost 5%. Moreover, the fall in frontline stocks such as ICICI Bank and Reliance Industries also weighed on the markets. The Sensex saw a significant decline of 464.22 points to reach 85,107.63 in early trade, while the Nifty 50 also saw a decline of 133.85 points to 26,045.10.

Technical analysts of the derivatives segment report that the weekly Nifty 50 contract shows the highest open interest of 27,000 for Calls and 25,000 for Puts, while monthly contracts have the highest open interest of 27,000 for Calls and 26,000 for Puts. The highest new OI addition occurred at 27,000 for Calls and 26,250 for Puts in the weekly contracts, and at 27,000 for Calls and 26,400 for Puts in the monthly contracts.

Foreign Institutional Investors (FIIs) increased their future long positions on the index by 4.08%, reduced future shorts on the index by 5.92% and an increase of 56.13% in Call longs, 38.38% in Call shorts, 48.60% in Put longs and 22.92% show. % in Put shorts in index options.

Technical insights by Rupak De, Senior Technical Analyst, LKP effects in the F&O market

Bank Handy

For Bank Nifty, the last expiry date was Wednesday, September 25. Bank Nifty remained above the previous swing high on the daily time frame, indicating a bullish setup. However, after a sharp rally, the index appears to be showing signs of fatigue and may consolidate lower before resuming its uptrend. Furthermore, a bearish Anti-Gartley pattern has emerged on the daily chart, indicating the potential for a short-term correction. This correction could take Bank Nifty down to around 52,450 after which a recovery could occur. Resistance is seen at 54,500.

Open Interest Analysis: PUT writers added substantial position reductions on Friday; while CALL writers added substantial positions at the 54,300 and 54,200 strikes. The maximum open interest for CALL is seen at 54,500/54,000 strikes and the maximum open interest for PUT is seen at the 54,000 strike, indicating near-term weakness. Overall, there are more CALL writers than PUT writers for the current weekly expiration date.

Handy 50

For Nifty 50, the last expiry date was Thursday, September 26. The Nifty 50 has paused after several days of continuous gains. However, short-term sentiment remains strong as the index continues to trade above the key 21-day EMA. Although the daily chart shows a bullish crossover, the momentum appears somewhat tired. Market strength is likely to continue as long as the index remains above 25,900. On the upside, a fresh rally could start if the Nifty 50 breaks above 26,300, potentially moving it towards 26,600. Conversely, a drop below 26,150 could lead to a drop towards 25,900, and below that level selling pressure could increase further.

Open Interest Analysis: PUT writers added significant positions at 26,250/26,200 strikes; while significant CALL writing was visible at 26,250/26,400. Huge open interest on PUT was seen at the 26,000 strike, while maximum open interest on CALL was seen at 26,500, followed by 26,200, indicating a range-limited market, with a decent support level at 26,000. Both PUT and CALL writers remained equally active in the market. weekly due date.

Tech stock recommendations for the week

Buy Reliance Industries Ltd (RIL). ₹3,052; Target price: ₹3,150/3,300; Stop loss at ₹2,949

The stock has risen above the descending trendline, indicating a potential bullish reversal in the near term. Moreover, the recent price rally started after support was found around the recent low, further strengthening the case for a bullish reversal. On a broader scale, the stock has been trading within an upward sloping channel, and it appears to be heading towards the upper band of this channel. In the short term, the stock could rise towards ₹3,300. Support is visible on ₹2,949 (on a closing basis), and a break below this level could cause the rally to lose momentum.

Buy Amara Raja Energy & Mobility Ltd ₹1,370-1,385; Target price: ₹1,455/1,500; Stop loss at ₹1,314

The stock found support at a previous swing low before the latest price increase. Furthermore, it has formed a bullish engulfing pattern, a classic bullish reversal candlestick pattern. The RSI has also made a bullish crossover near the oversold zone, further supporting the potential for an upward move. In the short term, the stock could rise towards ₹1,500. Support is visible on ₹1,314 (on a closing basis), and a break below this level could cause the rally to lose momentum.

Buy Gujarat Gas Ltd at ₹610-616; Target price: ₹630/650; Stop loss at ₹594

The stock has made higher lows on the daily chart, indicating a bullish setup. Additionally, it remained above a critical moving average in the daily time frame. In the short term, the stock could continue to rise towards ₹650. Support is visible at ₹594 (on a closing basis), and a break below this level could weaken upside momentum.

Disclaimer: The above views and recommendations are those of individual analysts, experts and brokerage firms, not Mint. We advise investors to contact certified experts before making an investment decision.