F&O Strategy: Buy Infosys, sell Tata Elxsi, suggests Rupak De as Indian stock market continues its downward trend

Stock Market News: The domestic benchmark indices, Nifty 50 and Sensex, maintained their downward momentum on Monday, as the bearish sentiment persistently dragged the markets lower.

The Nifty 50 index began the day with a drop of 60 points, or 0.25%, settling at 24,087.25 points, while the Sensex started at 79,312.13, experiencing a decline of 174 points, or 0.22%.

According to technical analysts in the derivatives segment, Nifty 50 may consolidate and struggle for direction in a fresh week of trading. The weekly Nifty 50 contract exhibits the highest open interest (OI) with 25,000 for Calls and 22,250 for Puts, while the monthly contracts show the highest open interest at 26,000 for Calls and 23,000 for Puts. The most significant new OI addition for weekly contracts occurred at 25,000 for Calls and 22,250 for Puts, whereas for monthly contracts, it was at 24,600 for Calls and 24,000 for Puts. FIIs reduced their long positions in future indices by 0.87%, while they raised their future index short positions by 1.59%.

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

Bank Nifty

For Bank Nifty the last expiry date was Wednesday, November 6. The Bank Nifty has declined for the second consecutive session. However, strong support is observed at 51,500, and as long as it remains above this level, the sentiment is likely to stay positive, with potential for the index to reach 52,500 in the short term. Conversely, if it falls below the 51,500 support, the index may decline further toward 50,700/50,500.

Open Interest Analysis: Notable PUT writing was visible at 50,800 strike on Friday; while significant CALL writing was visible at 52,000 and 52,500. Maximum Put open interest is seen at 51,000 and maximum CALL open interest was seen at the 52,000/52,500 strike, indicating the broader range for the near term. Overall, the CALL writers seen outnumbering PUT writers in the weekly expiry.

Nifty 50

For Nifty 50 the last expiry date was Thursday, November 7. The 24,000 level looks like solid support for the index. If Nifty manages to hold above this level, the bulls might still have a shot at regaining momentum. But if it slips below 24,000, the market could weaken further. With the RSI indicator showing a positive crossover, short-term momentum seems likely to stay strong. In the coming days, we might see the index push toward 24,500, though a drop below 24,000 could trigger a correction.

Open Interest Analysis: Significant PUT writing was visible at 24,100 strike on Friday; while CALL writing activities was visible at 24,200. Maximum CALL and PUT open interest position was seen at the 24,500 and 24,200 strikes respectively, indicating a near term range for the Nifty 50. CALL writers seen outnumbering PUT writers in the weekly expiry.

Technical stock recommendations for the week

Sell Tata Elxsi at ₹6,900; Target Price: ₹6,700; Stop Loss at ₹7,000

The stock has given a consolidation breakdown on the daily chart, suggesting a rise in optimism. In addition, the RSI on the daily timeframe is in a bearish crossover and falling. The price has been sustaining below the critical moving average. On the lower end, it might fall down towards ₹6,700; while a resistance is placed at ₹7,000.

Buy Infosys at ₹1,827; Target Price: ₹1,920; Stop Loss at ₹1,790

The stock has moved up higher after a consolidation breakout on the hourly timeframe. The sentiment looks positive from here which might take the stock towards ₹1,920 in the short term. On the lower end, support is placed at ₹1,790.

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