The Nifty50 is expected to consolidate above 10,400 in the coming week. Eventually, it should be able to move towards 10,600. Oversold stocks have started to perform on the back of closure of short positions as Nifty resilience continues.
The rupee appreciation mode has given much-needed support to the market. Despite FIIs being in profit booking mode, crude moving up towards 65 and 10-year G-sec yield trading higher above 7 percent, rupee resilience is really noteworthy.
This is the reason why the much needed short covering in beaten-down stocks has finally panned out in the equity markets. The Nifty has traded below 10,500 for the entire series.
Hence, Call positions at this strike are near 6.5 million shares. However, as the Nifty has recovered above 10,400 only after Gujarat elections outcome, the Put base at this strike is already more than 5 million shares as we are moving towards expiry.
Hence, the Nifty has been able to sustain above 10,400 amid more rangebound sessions. Volatility has cooled off from 17 percent to 12 percent after the recent election outcome. This means Put writers have become active for this expiry perspective.
IT heavyweights supported the market when some banking heavyweights remained under pressure. Higher guidance from Accenture is leading to some recovery in Indian IT stocks before their result announcements starting from January 12.
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