Technical and Derivatives Review | June 01, 2019
Some reality check post the event, bias still remains positive
Sensex (39714) / Nifty (11923)
Source: Investing.com
Future outlook
The eventful week was followed by a head start on Monday as we once again started our march towards the 12000 mark. During the week,
we did manage to reclaim this milestone but somehow unable to sustain at higher levels. In fact on Friday, everything looked hunky dory
and we were all set to hit fresh record highs. But suddenly from nowhere, top index heavyweights took a complete nosedive and within a
blink of an eye, we were nearly 200 point off in Nifty. Fortunately, this selling was absorbed by buyers awaiting at lower levels and hence, a
recovery thereafter pushed index above 11900 to register a highest ever weekly close.
During the week, we clearly witnessed a consolidation and this is quite evident as the overall uncertainty is behind us post the favourable
election verdict. In fact, it’s a typical characteristic of a market, which never gives easy money when the trade becomes obvious and is
known for giving sharper moves when they are least expected. Now as far as levels are concerned, 11600-11500 has become a near term
base and for the forthcoming week, 11840 can be seen as a sacrosanct level. Till the time, we are above these levels, the bias remains
positive and we expect a gradual march towards 12050-12200. However having said that one needs to be very fussy now while selecting a
stock as we saw on Friday, we cannot just become complacent; because in between we may experience such reality check.
During the week, the IT index had an encouraging move after recent underperformance. In fact, it was the only heavyweight pocket who
could post steady gains throughout the week. Apart from this, there is nothing much to comment on the sectoral front and hence, we need
to closely observe how individual pockets perform in first couple of days of the forthcoming week, which would give some idea about
potential movers.
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Technical and Derivatives Review | June 01, 2019
Long Short Ratio back to 60%
Nifty spot closed at 11922.80 this week, against a close of 11844.10 last week. The Put-Call Ratio has increased from 1.23 to 1.43.
The annualized Cost of Carry is negative at 0.71%. The Open Interest of Nifty Futures has decreased by 17.41.
Derivatives View
Nifty current month future closed with a discount of 6.30 points against a premium of 62.55 points to its spot. Next month future is
trading with a premium of 30.65 points.
As far as Nifty options activities for the week are concerned, build-up was scattered between 12100-12500 calls. On the other side,
11800-11900 puts added decent positions. Maximum open interest for monthly June series now stands at 12500 call and 11500 put
options.
During last series, we observed decent long formation in both the indices and we believe some of these positions have been rolled
over too. Rollovers in Nifty stood at 71.93%, slightly higher to the 3-month averages. Throughout the series, stronger hands formed
hedged positions (selling index futures and buying equities) which resulted in a decline in their index futures ‘Long Short Ratio’ from
75% to 50%. However, on the expiry day they rolled over fewer shorts which bought this ratio back to 60%. At current juncture,
12500 call and 11500 puts are attracting trader’s attention. Considering the rollovers and the price action in heavy weight individual
counters we maintain our optimistic stands on market and soon expect Nifty to surpass the immediate hurdle around 12000 mark.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
BERGEPAINT
4034800
124.75
328.90
5.38
VEDL
47083800
35.28
161.15
(1.98)
CUMMINSIND
1449700
23.72
780.30
3.70
HINDZINC
6044800
17.92
246.95
(2.76)
PFC
28594400
19.27
124.75
7.64
GLENMARK
4588000
10.82
547.25
(2.42)
KSCL
657000
18.06
548.50
12.21
PCJEWELLER
13182000
10.34
64.15
(36.86)
UJJIVAN
3217600
14.20
363.05
4.25
NCC
42896000
10.10
97.70
(14.67)
Weekly change in OI
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Technical and Derivatives Review | June 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
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E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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