F&O strategy: Buy ICICI Bank, Hindalco, Usha Martin, suggests Rupak Dey as Indian stock market gives up early gains

Stock Market News: Nifty 50 and Sensex gave up their early gains in Monday’s session as profit-booking across the board overshadowed the post-result rally in top private lender HDFC Bank. By 11:32 IST, Nifty 50 fell 0.26% to 24,790.30, while Sensex fell 0.24% to 81,040.47. Both indices had initially opened with gains of about 0.4%.

As analysts underlined, this week will mainly focus on the release of quarterly financial results and continued participation of foreign investors.

According to technical analysts in the derivatives segment, foreign institutional investors (FIIs) are maintaining short positions in index futures. Their long-short ratio is currently around 33.5%. In the options segment, 25,000 call options have seen the highest open interest buildup in the weekly series, which is the immediate hurdle, followed by 25,200-25,250 range. On the other hand, 24,600-24,500 is a near-term support zone. Analysts expect the index to oscillate within this range in the short term. A breakout beyond these ranges will lead to the next directional move.

Technical views by Rupak Dey, Senior Technical Analyst, LKP Securities on the F&O market

bank nifty

The last expiry date for Bank Nifty was Wednesday, October 16. Bank Nifty has moved above its previous swing high on the hourly chart, indicating growing optimism in the near term. The index has also risen above the 50 EMA, indicating a positive trend ahead. On the positive side, a decisive move above 52,100 could lead to a rally towards 52,580/52,850. On the downside, support is seen at 51,700, and a break below this level could trigger a decline.

Open Interest Analysis: Call unwinding at various strikes was visible on Friday; While significant Put writing was visible at 51,500 indicating strong support at 51,500 for the short term. Maximum Call Open Interest is seen at 53,000 and Maximum Put Open Interest is seen at 51,500 strike, indicating a wide range for the near term. Overall, call writers slightly outnumbered put writers at weekly expirations.

nifty 50

The last expiry date for Nifty 50 was Thursday, October 17. Nifty 50 has seen a sharp rise after hitting a low near 24,570, unable to stay below the 24,700 mark. A positive divergence on the hourly RSI (14) points to a shift towards stronger price momentum. The immediate hurdle now lies at 24,900, a level that previously served as support. If Nifty 50 manages to break above this, it could fuel a short-term rally and as long as it remains above 24,750, the trend is expected to remain strong.

Open Interest Analysis: Put writing was significant at 24,700 strike on the first day of the new close; While CALL write activities were visible at 24,900. Maximum call and put open interest positions were seen at 25,000 and 24,500 strikes respectively, indicating a wide range for Nifty 50. Weekly expiry saw call writers outnumbering put writers.

Tech Stock Recommendations for the Week

Buy Near ICICI Bank 1,260; target price: 1,300/1,340; stop loss here 1,224

The stock has surpassed its recent highs and formed a bullish engulfing pattern on the daily chart. It has re-entered the ascending channel on the daily time frame, with the RSI indicating a bullish crossover. In the short term, the stock may move towards 1,300/1,340, while downside support is placed at 1,224.

Buy Hindalco Industries Limited at approx. 750; target price: 784; stop loss here 734

The stock remains above its previous swing high on the daily chart. A downward consolidation breakout on the daily time frame has helped drive the recent price rise. Momentum is expected to remain strong in the short term, with a rise to 784 likely. On the downside, support is placed at 734.

Buy Usha Martin Ltd at approx 430; target price: 450; stop loss here 419

Usha Martin share price has broken out of a consolidation pattern on the hourly charts, indicating rising interest in the stock. Furthermore, the stock remains above the 50 EMA on the hourly charts, indicating a bullish trend in the short term. On the upside, it may move towards 450 with support at 420.

Disclaimer: The above views and recommendations are those of individual analysts, experts and broking companies, and not of Mint. We recommend investors to check with certified experts before taking any investment decision.