Technical and Derivatives Review | March 01, 2018
Banking index nearing ‘make or break’ level
Sensex (34047 ) / Nifty (10458)
Source: Trading View
Future outlook
This has not been so volatile week for our markets if we look at the wild swings that are creating chaos in US markets these days.
The Nifty remained within a range of 200 points which is by far a thinner range for the benchmark. Yes, we would agree on the point
that we are in a ‘Sell on rise’ kind of market. But, last three days small correction has nothing to with this opinion as we interpret this
correction just as a part of the recent consolidation phase.
With a slightly broader view, we can see a ‘Bearish Engulfing’ pattern formed at the end of the Budget week. We have already seen a
small consequence of this pattern but the real impact is yet to be witnessed. For the coming week, we are keeping a close eye on the
10400 mark as we now can see an ‘Upward sloping Trend Line’ converging around this point. A sustainable breach below this crucial
support would result into a sharp correction towards 10300 followed by 10140. With a near term view, we continue to remain
cautious on the market but ideally we would be convinced to go short only after seeing few days of more such time-correction or a
relief rally to retest the higher range of 10640. Probably, first half of the forthcoming week would unfold this suspense and would
make the picture slightly understandable.
We reiterate that within this consolidation, one should ideally remain light on index and focus more on individual stocks. At present,
the Nifty Bank index is placed around its ‘make or break’ level and hence, one needs to keep a close track of the crucial support of
24780. If any bounce has to come in the market then the only catalyst that can make it possible is the banking index.
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Technical and Derivatives Review | March 01, 2018
Index trading at the lower side of the range 10400-10700
Nifty spot closed at 10458.35 this week, against a close of 10491.05 last week. The Put-Call Ratio has decreased from 1.43 to 1.29
and the annualized Cost of Carry is negative at 0.23%. The Open Interest of Nifty Futures increased by 16.35%.
Derivatives View
Nifty current month future closed with a discount of 1.80 points against a premium of 13.50 points to its spot. Next month future is
trading with a premium of 33.80 points.
In Nifty options front, we saw good amount of open interest addition in 10700, 10800 and 11000 call options. On the flip side, some
build-up was seen in 10300 and 10500 put strikes. Now, maximum concentration of open interest has shifted higher from 10700 to
10800 call; whereas, in put remains intact at 10400 strike price.
During the week, index recovering but once again 10600-10650 mark acted as a strong hurdle resulting some selling pressure at
these levels. Eventually, index concluded the week with a cut of 0.46%. As far as futures activities are concerned, saw mixed
positions forming in index futures; while, fresh longs were seen in stock futures segment. In index options front, we saw decent long
formation in call options, resulting PCR-OI declining from 1.43 to 1.29. At current juncture, 10400 is a strong support zone for index;
whereas, 10600-10650 shall act as an immediate hurdle.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
TV18BRDCST
77588000
15.31
62.00
6.07
BANKINDIA
24378000
40.15
113.70
(12.2
VOLTAS
3144000
14.58
618.70
4.39
PNB
83816000
38.80
101.25
(11.3
NIITTECH
1531500
16.69
872.70
4.28
CANBK
12835200
28.41
291.60
(7.7
IDBI
68910000
25.82
80.75
3.93
ORIENTBANK
16272000
19.84
99.05
(7.3
BHARATFORG
6889200
8.04
784.45
3.87
SAIL
105744000
24.24
81.30
(7.2
Weekly change in OI
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2
Technical and Derivatives Review | March 01, 2018
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
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E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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