Technical Picks | April 2, 2016
Strong hurdle at 7800, avoid aggressive longs
Sensex (25270) / Nifty (7713)
After a truncated previous week, trading took off on Monday
Exhibit 1: Nifty Weekly chart
with a mildly positive bias. However, the early morning
optimism was short lived; the market underwent a steady
correction throughout the remaining part of the day and
ended with a loss of more than a percent. This was followed
by a subdued session on Tuesday where the Nifty managed
to consolidate around the 7600 mark. On Wednesday, the
market opened with a decent upside gap and was able to
maintain the strong optimism throughout the day, leading
the Nifty to close convincingly above the psychological mark
of 7700. In the following two days, the index once again
consolidated and concluded the week almost at the same
levels as the previous week’s close.
Source: Company, Angel Research
Pattern formation:
The ’89-day EMA’ and the ’89-week EMA’ for the
Exhibit 2: Nifty Daily chart
Sensex/Nifty are placed at
24905
/
7571 and
25597 / 7745 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
24841
/
7566 and
25028 / 7610 levels, respectively.
Future outlook
The concluded week’s price action was quite balanced as
both counter parties seemed to have met with their intra-
week targets. As far as our reading is concerned, our
mentioned trading range played out well during the week
gone by. Firstly, the strong resistance zone of 7750 - 7780
Source: Company, Angel Research
became the hurdle and at the lower end 7600 - 7550
played a sheet anchor role. Albeit, the Nifty managed to
However, having said that, we do not expect a sharp
conclude on a favorable note after the sluggishness it
correction as such but the possibility of some decent profit
suffered in the initial part of the week, but we still would like
booking cannot be ruled out and we believe that it would be
to adopt a slightly cautious approach. The important reason
a healthy development before we see the next leg of the rally
behind this is not only the 900 points vertical rally which
taking off. Thus, traders are advised to keep booking profits
could now lead the Nifty to take a breather, but also the
around 7750 - 7800 and concentrate on stock specific
convergence of key technical evidences around 7750 -
ideas. On the downside, two key supports for the upcoming
7800. On the weekly chart, we can observe a ‘Hanging
week are seen at 7580 and 7405. The RBI will announce the
Man’ pattern at the strong resistance of ‘89 EMA’ placed at
Monetary Policy in the upcoming week on Tuesday; thus,
7750. At 7800, we see a hurdle in the form of the 127%
traders can keep a note of it and accordingly position
retracement level of the last down move from 7600.45 to
themselves for the event.
6825.80. In addition, the ongoing rally also lacks conviction
to extend further due to the non-appearance of a ‘Higher
Bottom’ on the daily chart. All these observations are holding
us back from participating aggressively on the long side.
For Private Circulation Only
1
Technical Picks | April 2, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,551
24,910
25,195
25,554
25,839
NIFTY
7,496
7,605
7,691
7,800
7,886
NIFTY BANK
15,233
15,704
15,993
16,464
16,754
ACC
1,331
1,372
1,395
1,436
1,459
ADANIPORTS
225
234
242
251
259
AMBUJACEM
221
228
232
239
244
ASIANPAINT
824
847
866
889
908
AUROPHARMA
683
706
732
756
782
AXISBANK
408
429
441
461
473
BAJAJ-AUTO
2,278
2,349
2,403
2,474
2,528
BANKBARODA
132
142
148
158
164
BHEL
106
111
116
121
126
BPCL
833
860
891
918
949
BHARTIARTL
314
325
343
354
372
INFRATEL
355
370
382
397
408
BOSCH
18,928
19,408
20,204
20,684
21,480
CIPLA
473
494
515
536
558
COALINDIA
278
282
290
295
303
DRREDDY
2,793
2,887
2,981
3,074
3,168
EICHERMOT
17693
18473
18962
19742
20231
GAIL
335
341
352
358
368
GRASIM
3,671
3,762
3,824
3,915
3,978
HCLTECH
789
805
816
831
842
HDFCBANK
1,024
1,044
1,062
1,082
1,099
HDFC
1,049
1,081
1,124
1,156
1,199
HEROMOTOCO
2,769
2,860
2,923
3,014
3,077
HINDALCO
77
82
87
92
97
HINDUNILVR
844
856
867
879
891
ICICIBANK
215
227
234
246
253
IDEA
97
102
109
114
120
INDUSINDBK
889
925
948
984
1,006
INFY
1,166
1,186
1,211
1,231
1,257
ITC
313
324
331
342
348
KOTAKBANK
644
662
678
696
713
LT
1,167
1,203
1,225
1,261
1,284
LUPIN
1,163
1,314
1,431
1,582
1,699
M&M
1,138
1,167
1,216
1,245
1,294
MARUTI
3,562
3,643
3,710
3,791
3,858
NTPC
125
127
130
132
135
ONGC
201
205
212
216
223
POWERGRID
134
136
139
141
143
RELIANCE
995
1,015
1,035
1,055
1,076
SBIN
182
189
194
201
206
SUNPHARMA
734
775
810
851
886
TCS
2,363
2,409
2,479
2,525
2,595
TATAMTRDVR
252
269
287
303
321
TATAMOTORS
346
363
378
395
410
TATAPOWER
59
62
64
67
69
TATASTEEL
285
302
314
330
342
TECHM
444
454
469
479
495
ULTRACEMCO
3,049
3,127
3,193
3,270
3,337
WIPRO
536
549
561
574
585
YESBANK
816
836
855
875
895
ZEEL
364
375
384
396
405
Technical Research Team
For Private Circulation Only
2
Derivatives Review | April 2, 2016
Hint of profit booking from FIIs; avoid aggressive longs
Nifty spot closed at 7713.05 this week, against a close of 7716.50 last week. The Put-Call Ratio has decreased from 1.04 to 0.84
levels and the annualized Cost of Carry is positive at 6.26%. The Open Interest of Nifty Futures decreased by 27.68%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 1.04 to 0.84 levels. Being start
Implied Volatility (IV) for NIFTY has slightly increased from
of new series the overall build-up is quite scattered. In call
12.93% to 15.62%. Historical volatility (HV) of NIFTY is at
options, 7800-8200 strikes added good amount of OI.
20.77% and that for BANKNIFTY is at 28.77%. Liquid
While in put options, 7200-7700 strike remained active
counters having very high HV are ADANIPOWER,
and added decent build-up. Nifty is now trading near its
JPASSOCIAT, ADANIENT, HDIL and BHARTIARTL. Stocks
resistance zone of 7750-7800 levels, book profit. Maximum
where HV are on lower side are CROMPGREAV,
build-up in current series is seen in 8000 call and 7500 put
AMBUJACEM,
JUSTDIAL,
WOCKPHARMA and
options.
HINDUNILVR.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 35.70
`2,42,522/- cr. to `1,69,761/- cr. Stock futures open
points against a premium of 64.05 points to its spot. Next
interest has decreased from `55,972/- cr. to `52,726 /- cr.
month future is trading with premium of 63.15 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are BHEL, HDFCBANK,
week are CIPLA, POWERGRID, HDFC, M&M and INFRATEL.
ONGC, HINDALCO and POWERGRID. Stocks with
On the other hand unwinding was visible in counters like
negative CoC are JUSTDIAL, IDEA, COLPAL, HEXAWARE
INDUSINDBK, YESBANK, ULTRACEMCO, BPCL and
and HINDZINC.
TATAPOWER.
Derivative Strategy
Scrip: TCS
CMP : `2467.30
Lot Size : 200
Exercise Date (F & O) :
28th Apr 2016
View: Mildly Bearish
Strategy: Ratio Bear Put Spread.
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
200
TCS
2450
APR
PE
60.00
2200
(`58.00)
SELL
400
TCS
2350
APR
PE
26.00
2275
`17.00
LBEP - ` 2258/-
2350
`92.00
UBEP - ` 2442/-
2425
`17.00
Max. Risk: Unlimited
Max. Profit: `18,400/-
If TCS continues to move below LBEP on expiry
If TCS closes at 2350 levels on expiry.
2500
(`8.00)
NOTE: Profit can be booked before expiry if TCS moves in favourable direction and time value decays.
2575
(`8.00)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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