Nifty sees resistance at 5200 level: Jitendra Panda

Jitendra Panda
Sr V-P, Business Associate Group, Motilal Oswal Securities

Nifty continued to consolidate with moves within a 100-point range. It closed lower due to weak global cues. The recovery from lower levels in the second half led the December futures into premium. This consolidation and choppiness will make it difficult for traders to take a near-term term call.

Nifty December options traded at implied volatilities of less than 30%. This indicates that the participants do not expect any major fall in the market. Relatively larger put writing in 4900 and 5000 puts indicates the support for the month in the said range.

While the only major obstacle is placed at 5200, conquering which Nifty may see meaningful gains. Attempts to cross previous high of 5182 has failed multiple times. If the market makes a successful move in that direction, then Nifty shall face resistance at 5300 levels.

Stock futures continue to add more longs than shorts. The sectors to watch out will be IT and realty. With CNX IT adding longs in the past two days, we expect scope for more upside. Among stock futures in the IT sector, HCL Tech is the best long bet in the sector with a stop-loss at Rs 342 level.

The continuous incremental additions in open interest in real estate scrips indicate an upmove. In this sector one can initiate a bull spread in Unitech by buying Unitech December 90 call at 5; selling Unitech December 100 call at 1.9.