Technical and Derivatives Review | March 01, 2019
Index consolidates, real action lies in broader market
Sensex (36064) / Nifty (10863)
Source: Trading View
Future outlook
During the initial part of the week, Index remained under bit of pressure due to rising geo-political concerns on the domestic as well
as global front. During the latter half, the geopolitical concerns on the domestic front eased off a bit due to some positive
developments and this clearly had a rub off effect at the opening on Friday. We started the day with decent upside gap, which was
followed by a long consolidation in our benchmark index. In fact, index remained in a slender range throughout the day by
maintaining its positive posture. Eventually, the Nifty managed to close the week with gains about seven tenths of percent.
As far as levels are concerned, index has not gone anywhere and hence, we are still trapped in a trading range of 200 points i.e.
10930 - 10730. Only a sustainable breakout in either direction would lead to some trended move. Till then one should avoid trading
aggressively. However, having said that, we have been quite vocal on the fact that the broader market is showing some signs of
revival and this is what we have experienced in the week gone by. In fact, on Friday we saw some blown up moves in bunch of
individual stocks. Hence, it’s better to focus on such potential candidates rather than just scratching our heads, tracking a tick by tick
movement in index.
On Friday, the other heavyweight pocket ‘banking’ did extremely well as we saw the entire PSU banking space had a stellar rally.
Also, few midcap private banking names too did not stay back and they contributed considerably in Friday’s move. But the real
outshining pocket was ‘Pharmaceutical’ especially the midsize beaten down counters, some of which had an eye-popping move
towards the fag end of the day.
For Private Circulation Only
1
Technical and Derivatives Review | March 01, 2019
Scattered options data hints rise in volatility
Nifty spot closed at 10863.50 this week, against a close of 10791.65 last week. The Put-Call Ratio has increased from 1.37 to 1.69.
The annualized Cost of Carry is positive at 6.66%. The Open Interest of Nifty Futures has decreased by 36.59.
Derivatives View
Nifty current month future closed with a premium of 53.55 points against a premium of 55.75 points to its spot. Next month future
is trading with a premium of 102.00 points.
As far as Nifty options activities for the week are concerned, the overall build-up remained quite scattered. We saw open interest
addition in 10900-11500 call and 10300-11000 put options. Maximum open interest for February series now stands at 11000 call and
10700 put options.
It was the third consecutive series, which concluded in the vicinity of 10800. In the series gone by, we witnessed majority of long
formation in Nifty futures and few of these positions have been rolled too. Rollovers in Nifty stood at 60%, which is considerably
lower than the 3-month average of 65%. In fact, in terms of open interest too it was on the lower side. Now, the total outstanding
contracts are lowest in last 4 series. At present, Nifty is light in terms of open interest and further development may dictate its
upcoming direction. At current juncture, 10700-10750 is an immediate base for Nifty; whereas, hurdle is placed around 10900-
10950. However, looking at the last three series price action and scattered open interest in Nifty options, we expect volatility inching
higher going ahead. As of now, traders are advised staying light in index until we don’t see a sustainable move beyond the range of
10700-11000.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
CGPOWER
50400000
7.22
36.85
17.36
RELINFRA
14111500
60.01
126.20
(5.86)
ORIENTBANK
14007000
11.41
92.40
10.33
ADANIPORTS
22570000
23.43
335.55
(5.72)
JUSTDIAL
2482200
7.39
531.00
8.87
BHARTIARTL
37493500
1.62
307.25
(2.65)
RPOWER
104464000
37.60
12.45
6.87
MCX
2202900
2.18
681.00
(0.32)
ACC
2825600
20.34
1473.45
6.72
MFSL
1935600
4.60
404.55
(0.32)
Weekly change in OI
2
Technical and Derivatives Review | March 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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