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    ETMarkets Smart Talk: Nifty at 18,800 and Nifty Bank at 44,300 possible in December series: Manoj Vayalar

    Synopsis

    "We expect the Nifty to be positively biased. FIIs have started the series with 77% longs in index. Every time Bank Nifty leads the rally, it has more strength. We expect the same, at least in the first fortnight of December. So, the indices might be in 18,100-18,800 and 42,000-44,500 might range for the indices and 18,100 and above the bias is positive for the December series."

    Manojh Vayalar-1200ETMarkets.com
    The November Series ended on a high tone on Thursday and momentum is likely to continue in the December series as well, believes Manoj Vayalar, VP- Derivatives Research, Religare Broking. He believes that Bank Nifty has better strength and both indices, Nifty50 and Nifty Bank, may hit new highs in the new series. Edited excerpts:

    Nifty50 gained 4% during this series to settle close to 18,500, its highest closing. What have been the key reasons for this rally and do you see the momentum to continue?
    The November series started with around 60% long positions versus around 80% short positions in the previous month for FIIs. Follow up buying in the cash market by FIIs too supplemented the rally. We expect this momentum to continue towards 18,600 - 18,800 levels.

    NIfty Bank topped 43,000 levels during the session. What is your take on it? Do you think that there is more steam left in the banking barometer after entering the blue-sky zone?

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    Bank Nifty was at par to Nifty in November price-wise. However, fresh additional long rolls seen in December series might trigger an outperformance. We expect Bank Nifty to be in the 44,000-44,300 zone in December.

    What are your expectations from the next series for both Nifty50 and Nifty Bank? What are the key levels of support and resistance for the indices?
    We expect the Nifty to be positively biased. FIIs have started the series with 77% longs in index. Every time Bank Nifty leads the rally, it has more strength. We expect the same, at least in the first fortnight of December. So, the indices might be in 18,100-18,800 and 42,000-44,500 might range for the indices and 18,100 and above the bias is positive for the December series.

    What strategy should an investor follow to make the most out of Nifty50 and NiftyBank in the upcoming December series? What will your suggestion for the traders to navigate and make the best out of it?
    Since the VIX is at a year’s low of 13.5% using bull call ratio spreads in the index would be more prudent. For investors, largecap banks like HDFC Bank (Rs 1,590-1,600), Indusind Bank (Rs 1,160-1,170) and ICICI Bank (Rs 912-920) are buy on dips.

    For traders doing a covered call i.e. buying ICICI Bank and HDFC Bank at current prices and selling out of the money, Rs 1,700 for HDFC Bank, Rs 1,260 for IndusInd Bank and Rs 970 strike call option for ICICI bank seem prudent.

    Which bluechips or largecap stocks should a trader consider to buy in the next series? What are your top picks for the coming expiry?
    IndusInd Bank, Infosys, Indian Hotels and NTPC are our top picks for the December series. We like Exide Industries and Aditya Birla Capital from the midcap segment.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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