Nifty may head towards 18100; ‘stick to buy-on-dip approach, look for stock specific opportunities’ | The Financial Express

Nifty may head towards 18100; ‘stick to buy-on-dip approach, look for stock specific opportunities’

The immediate support for Nifty is placed in the range of 17600-17500 while 18000-18100 will be a range to watch out for on the higher side.

Nifty may head towards 18100; ‘stick to buy-on-dip approach, look for stock specific opportunities’
Traders are advised to keep a buy-on-dip approach until there’s any change in data and look for stock-specific opportunities with a positive bias

By Ruchit Jain

Post the sharp correction in the later part of the September series, Nifty started the October series on a positive note. The index formed a support base in the range of 17000-16750 and then it recovered gradually throughout the series. The intermediate dips during the series got bought into and the index ended the October expiry well above 17700 with gains of over 5 percent compared to last expiry closing. The October series started with rollover of short positions by the FII’s. However, as the series progressed, the global markets started to recover from their lows and the Nifty too formed a support base around 17000 mark and started to recover. Thus, we witnessed unwinding of short positions gradually which led to an upmove in the index.

The Bank Nifty index relatively outperformed at the start of the series when the benchmark consolidated around the support and hence as the markets recovered, we witnessed long formations in the banking space. Now both the indices have ended the series around the high point and if we look at the data, the rollover in Nifty is at 76 percent against its 3-month average of 79 percent. The rollover in Bank Nifty stands at 77 percent versus its average of 81 percent and the rollover indicates that short positions from October series have not been rolled over.

FII’s have traded with net short positions throughout the October series but their ‘Long Short Ratio’ at the start of the November series stands at 59 percent which indicates that they have rolled more of long positions to the November series. On the other hand, the Client section have been riding this trend with more of net long positions throughout the series and they too now have 59 percent long positions at the start of the November series.

Apart from the rollover data, if we look at the global cues then the US markets have been recovering from their respective long-term supports and the Dollar Index too has cooled off from the highs in the last few sessions. This will have a positive impact on the equity markets and until we see any formations of bearish positions again, the intermediate dips in the November series are likely to get bought into. The immediate support for Nifty is placed in the range of 17600-17500 while 18000-18100 will be a range to watch out for on the higher side. Traders are advised to keep a buy-on-dip approach until there’s any change in data and look for stock-specific opportunities with a positive bias.

(Ruchit Jain is the Lead – Research at 5paisa.com. The views expressed are the author’s own. Please consult your financial advisor before investing.)

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First published on: 28-10-2022 at 08:28:10 am
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