Technical and Derivatives Review | February 01, 2019
Eventful week ends with some hope of revival
Sensex (36470) / Nifty (10894)
Source: Trading View
Future outlook
We had a nervous start for the week which was in continuation of previous week’s corrective mode. During the first half, there were
bundle of stocks who literally took it on the chin mainly on the back of some negative news flow or poor set of quarterly numbers.
However, last couple of days turned out to be saviour for our markets as we saw massive rally one day ahead of the Union Budget
and on the day as well. In this process, Nifty eventually closed tad below the 10900 mark by adding nearly a percent to the bulls’
kitty.
One of the most keenly watched events, the ‘Union Budget’, is behind us now. On the day, Nifty once made a valiant attempt to
surpass the recent swing high of 10987.45; but as we know, such days are known for their extreme volatility and this is exactly we
saw in the latter half. In the midst of this volatility, Nifty became successful in defending some key levels. Recently, our markets had
to undergo a stressful period and fortunately last two days have come up with some respite. With this, index eventually recouped its
previous week’s losses and in the midst of an extremely volatile trade, has managed to close relatively in the safer zone.
Yes, although, we are yet to surpass the sturdy wall of 11000, looking at the broader market participation today, we will not be
surprised to see it happening in the forthcoming week. And since there are some hopes built in on the possible rate cut from the RBI
in next week’s policy, this would provide some impetus and therefore increases the possibility of surpassing the sturdy wall of
11000. However, having said that, Friday’s low of 10800 would now be seen as a crucial support. A sustainable move below this may
give a dent to all the above mentioned possibilities. At this juncture, a prudent strategy would be to keep focusing on individual
stocks which have shown tremendous resilience despite recent uncertainty in the market.
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Technical and Derivatives Review | February 01, 2019
Nifty OI plunged to 3-month lows
Nifty spot closed at 10893.65 this week, against a close of 10780.55 last week. The Put-Call Ratio has decreased from 1.37 to 1.21.
The annualized Cost of Carry is positive at 2.53%. The Open Interest of Nifty Futures has increased by 6.47%.
Derivatives View
Nifty current month future closed with a premium of 20.40 points against a premium of 38.00 points to its spot. Next month future
is trading with a premium of 48.25 points.
As far as Nifty options activities for the week are concerned, being start of new series the overall build-up is scattered between
10800-11500 call and 10400-10900 put options. Maximum open interest for February series now stands at 11000 call and 10700 put
options.
Unlike volatile December series, the preliminary series of the calendar year 2019 remained subdued by vacillating in a range of
10600-11000. In the series gone by, we witnessed majority of short formation in Nifty futures along with decent writing in index call
options. But, we hardly saw these positions getting rolled over in the February series. FIIs were constantly selling in cash as well as
index futures segment. Subsequently, they were buyers in stock futures and preferred rolling these positions too. Rollovers in Nifty
stood at 61.84%, which is far less than the 3-month average of 69%. At present, Nifty is light in terms of open interest and further
development may dictate it’s up move direction. However, looking at last two days recovery and stock specific action, we expect
continuation of upward move going ahead.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
JUBLFOOD
4776000
10.49
1360.15
13.09
DHFL
24361500
24.48
110.00
(47.15)
HCLTECH
10322200
8.81
1044.10
7.31
AJANTPHARM
678500
10.87
983.00
(13.02)
HEXAWARE
3325500
7.10
349.20
7.66
CEATLTD
1391200
20.51
1075.60
(9.84)
EQUITAS
11492000
4.06
125.25
6.82
IBULHSGFIN
14211000
8.91
671.30
(9.63)
AXISBANK
39818400
9.90
717.80
6.81
GODREJCP
5618400
12.94
713.45
(9.02)
Weekly change in OI
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Technical and Derivatives Review | February 01, 2019
Technical and Derivatives Team:
Sameet Chavan
Chief Analyst - Technical & Derivatives
[email protected]
Ruchit Jain
Technical Analyst
[email protected]
Rajesh Bhosale
Technical Analyst
[email protected]
Sneha Seth
Derivatives Analyst
[email protected]
Research Team Tel: 022 - 39357600
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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