1
For Private Circulation Only
Technical and Derivatives Review
| May 02, 2020
Nifty close to 10000, but eyes on geopolitical concerns
Sensex (33718) / Nifty (9860)
Source: Trading View
Future outlook
Since the last week of March, our markets have somehow managed to stabilise from recent mayhem and then gave some decent recovery
thereafter. Until Tuesday’s session, Nifty was struggling to surpass the 9400 mark. But due to strong buying momentum in last couple of
sessions, the Nifty finally broke out from this sturdy wall and went on to close convincingly above 9800 mark.
The March month was one of the worst months for our markets in history ever, but fortunately, this was followed by a stupendous April
month during which we managed recoup 50% of the damage done in March. Mainly it was a broad based rally and some of the laggard
spaces like Financials and Auto contributed heavily, which provided credence to the move. Looking at the overall set up by taking
Thursday’s close, the Nifty is very much poised for an extended move towards 10200-10400, which would be seen as a strong hurdle for the
market. Traders should start lightening up positions in the mentioned zone and then wait for further signals. But before this, there is an
important development happened on a global front over the past couple of days, which cannot be overlooked.
The US President Donald Trump has threatened China to impose new tariffs, which could lead to a resumption of trade war. Hence, market
participants across the globe looked intimidated, resulting into a sharp decline across the globe. The SGX Nifty too reacted negatively to this
development and is showing a massive cut. On Monday, we need to see how our market actually reacts to it and if they open in line with
SGX Nifty, 9300 and 9100 would be seen as crucial supports. If we fail to hold them, this would apply brakes on recent optimism and in this
case, we will have to revisit our view. However, if our markets doesn’t react to the tune of SGX Nifty and shows some buying interest at
lower levels, the above mentioned, bull case scenario remains valid. So all eyes would be on this global development, which would dictate
the immediate path of action for our markets.
2
For Private Circulation Only
Technical and Derivatives Review
| May 02, 2020
Stronger hands cover shorts as market rallies
Nifty spot closed at 9859.90 this week, against a close of 9154.40 last week. The Put-Call Ratio has increased from 1.34 to 1.89. The
annualized Cost of Carry is negative at 3.84%. The Open Interest of Nifty Futures has decreased by 17.92%.
Derivatives View
Nifty current month future closed with a discount of 29.05 points against a premium of 9.40 points to its spot. Next month future is
trading with a discount of 22.45 points.
As far as Nifty options activities for the week are concerned, we witnessed additions in put options during the expiry week whereas
call writers ran for cover as the market rallied. However, for the coming week, open interest data is scattered being the start of new
monthly F&O series. Maximum open interest for the May monthly series now stands at 10000 call option and 9000 put option.
During the week, the Nifty rallied higher as we witnessed short covering along with fresh long formations in the expiry week. The
rollover in Nifty is at 71.29 percent which is in line with 3-month average of 70.36 percent. The rollover in Bank Nifty is higher at
81.59 percent v/s 3-month average of 70.56 percent. FII’s started April series with ‘Long Short Ratio’ in index futures at 29.63
percent. During the series they covered their positions and even formed fresh longs when the index moved up. Their Long Short
Ratio’ now stands at 64.42 percent and thus they have covered much of their shorts. The important supports for Nifty are placed
around 9500 and 9200 levels whereas resistance is around 10000. Traders are advised to keep a tab on the market movement in the
next few days of the new series which would provide a clear idea on the probable short term direction.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
HINDPETRO
18954600
27.47
220.65
9.31
TECHM
15771600
10.58
546.45
8.54
BPCL
16815600
9.56
371.25
5.94
ULTRACEMCO
2207400
9.07
3536.40
6.84
INFY
49458000
7.75
717.85
9.05
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
CUMMINSIND 1205100 5.52 378.40 (1.50)
MARICO
11196900
4.05
287.35
(5.82)
HINDUNILVR
13071300
4.00
2198.65
(3.75)
TORNTPHARM
836500
3.53
2353.35
(3.40)
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3
For Private Circulation Only
Technical and Derivatives Review
| May 02, 2020
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]g.com
Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]com
Sneha Seth Derivatives Analyst [email protected]gelbroking.com