"Derivatives Weekly View" report by ICICI DIrect:
The Nifty has given a good move from 10900 to 11200 during the week and held on to these gains towards the end.
The coming week has monthly expiry. Thus, the trend will be decided by the closure of Call writing positions, which are placed at the 11200 strike. Some positions have already shifted to 11500 strike, which will remain a target for coming weeks.
IT stocks supported the market along with an energy heavyweight. We believe banks may also support the index and declines can still be bought as short covering may be seen in banking stocks in the expiry week.
Target for Bank Nifty at 23500 for July expiry:
As the Nifty managed to move above 11000, the Bank Nifty finally managed to gauge its pace and moved towards its sizeable Call base of 23000 during the week whereas most of its components supported the move. Quarterly numbers of HDFC Bank and Axis Bank provided required boost whereas more triggers can be seen ahead as other heavy weight numbers are lined up.
We may see stock specific movement and pick-up in rollover activity as we move in the expiry week. However, we continue to feel midcap private banks are well placed to see another 6-10% move.
Positional Future Recommendation:
Long HDFC Bank (HDFBAN) July future in the range of | 1105-1110. Target: | 1195; Stop Loss: | 1050
The Bank Nifty has started showing early signs of outperformance vis-a-vis the Nifty. We expect sectoral heavyweight HDFC Bank to take the lead in the recovery. The stock had the highest Call base at the 1100 strike since inception of the series. It has moved above these levels post its quarterly results. Since then, it has been consolidating above 1100. However, major Call base is still placed at the 1100 Call strike. We expect short covering to be seen in the stock towards settlement. Since the highest Put base is also placed at the 1100 strike, hence major downsides are not expected. (Share Manthan, 25th July, 2020)