Technical Picks | July 2, 2016
8300 outdone, 8600 next
Sensex (27145) / Nifty (8328)
A ‘BREXIT’ day was followed by a soft opening on Monday at
Exhibit 1: Nifty Weekly chart
our domestic market, in line with slightly negative cues from
the global peers. However, this pessimism was short lived as
we witnessed a decent recovery later in the session, thereby
leading the Nifty to close just a tad below the 8100 mark.
On Tuesday, our market convincingly reclaimed the 8100
mark on a closing basis although the overall intraday range
was very small. This was followed by the Nifty opening gap
up for three consecutive sessions and on the back of the
gushing momentum, it surpassed the 8300 mark on a
weekly closing basis. The index ended the week with a
handsome gain of 2.96% over its previous week’s close.
Key Moving Averages:
Source: Company, Angel Research
The ’89-day EMA’ and the ’89-week EMA’ for the
Exhibit 2: Nifty Daily chart
Sensex/Nifty are placed at
25913
/
7924 and
25713 / 7805 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
26663
/
8175 and
25899 / 7921 levels, respectively.
Future outlook
We saw a clear outperformance by our market in the
concluded week post the unfolding of the BREXIT event. The
first hint of strength was evident when Indian equities
corrected much lesser than their global counterparts in
reaction to the outcome of the ‘BREXIT’ referendum in the
Source: Company, Angel Research
previous week. The Nifty has since given a v-shaped
recovery towards the recent highs, which is quite
We have been repetitively advising against shorting this
remarkable. In fact, the strength in the momentum led the
market ever since Nifty traversed the 8000 mark and we
Nifty to breakout beyond the 8300 mark on a closing basis
continue to do so. Going forward, 8240 - 8200 are now
and post its highest closing of the calendar year 2016. Now
seen as immediate support levels and resistance would be
if we meticulously observe the daily as well as the weekly
seen at 8420 - 8510 for the forthcoming week. Meanwhile,
charts, the next major resistance stands as far as 8654.75
traders can continue to follow a stock-centric approach to
(July
2015 high). In addition, one of the noteworthy
find potential trades.
observations is that the ‘RSI-Smoothened’ oscillator on the
weekly chart has just crossed the 70 mark, which certainly
bodes well for the market in the near term. Thus, looking at
the ongoing strong up trend, we expect the Nifty to gradually
move towards this next hurdle.
For Private Circulation Only
1
Technical Picks | July 2, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
25,903
26,524
26,884
27,505
27,864
NIFTY
7,924
8,126
8,241
8,444
8,559
NIFTY BANK
17,074
17,530
17,802
18,258
18,531
ACC
1,542
1,579
1,603
1,641
1,664
ADANIPORTS
199
202
205
207
211
AMBUJACEM
242
248
253
258
264
ASIANPAINT
954
978
995
1,019
1,035
AUROPHARMA
680
713
733
766
786
AXISBANK
493
518
532
557
570
BAJAJ-AUTO
2,564
2,618
2,669
2,722
2,774
BANKBARODA
142
149
154
161
165
BHEL
113
123
128
137
142
BPCL
985
1,038
1,070
1,124
1,156
BHARTIARTL
341
354
364
378
387
INFRATEL
309
330
342
362
374
BOSCH
19,896
21,290
22,194
23,588
24,492
CIPLA
462
485
498
521
534
COALINDIA
302
306
310
314
319
DRREDDY
3,000
3,242
3,374
3,616
3,748
EICHERMOT
17,992
18,574
19,012
19,593
20,032
GAIL
366
381
389
403
412
GRASIM
4,123
4,383
4,540
4,801
4,958
HCLTECH
689
710
730
751
771
HDFCBANK
1,122
1,148
1,167
1,193
1,211
HDFC
1,184
1,213
1,240
1,269
1,295
HEROMOTOCO
2,929
3,058
3,142
3,270
3,354
HINDALCO
112
119
122
128
132
HINDUNILVR
837
867
886
916
935
ICICIBANK
224
232
237
246
251
IDEA
96
101
105
110
113
INDUSINDBK
1,055
1,089
1,109
1,143
1,163
INFY
1,141
1,157
1,171
1,186
1,200
ITC
226
239
249
263
273
KOTAKBANK
704
729
748
772
791
LT
1,388
1,465
1,505
1,582
1,622
LUPIN
1,426
1,490
1,524
1,588
1,622
M&M
1,342
1,402
1,439
1,499
1,536
MARUTI
3,918
4,042
4,128
4,252
4,338
NTPC
143
150
154
161
164
ONGC
199
212
221
234
243
POWERGRID
148
157
162
170
175
RELIANCE
927
950
964
987
1,001
SBIN
206
213
217
224
229
SUNPHARMA
739
751
765
777
791
TCS
2,402
2,451
2,508
2,558
2,614
TATAMTRDVR
279
285
293
299
307
TATAMOTORS
420
439
452
471
484
TATAPOWER
71
72
74
76
77
TATASTEEL
298
313
322
337
346
TECHM
491
501
509
519
527
ULTRACEMCO
3,196
3,305
3,390
3,500
3,585
WIPRO
531
545
555
569
579
YESBANK
1,037
1,083
1,109
1,155
1,180
ZEEL
421
437
449
465
477
Technical Research Team
For Private Circulation Only
2
Derivatives Review | July 2, 2016
Long rollover indicates upward bias to continue
Nifty spot closed at 8328.35 this week, against a close of 8088.60 last week. The Put-Call Ratio has decreased from 1.07 to 0.98
levels and the annualized Cost of Carry is positive at 4.35%. The Open Interest of Nifty Futures increased by 12.69%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 1.07 to 0.98 levels. In call
Implied Volatility (IV) for NIFTY has increased from 17.47%
options, 8300-8700 strikes added good amount of build-
to 14.36%. Historical volatility (HV) of NIFTY is at 17.25%
up. While in put options, significant amount of OI addition
and that for BANKNIFTY is at 21.32%. Liquid counters
was visible in 8000-8300 strikes, some build-up was also
having very high HV are IOC, GRASIM, ABIRLANUVO,
seen in 7800 and 7900 put strikes. Maximum OI in current
MCLEODRUSS and BIOCON. Stocks where HV are on
series is visible in 8500 call and 8000 put options.
lower side are TECHM, CROMPGREAV, TATAMTRDVR,
ASHOKLEY and ADANIPORTS.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 26.80
`2,56,555/- cr. to `1,92,806/- cr. Stock futures open
points against a premium of 29.75 points to its spot. Next
interest has decreased from `66,524/- cr. to `61,460/- cr.
month future is trading with premium of 57.95 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are ADANIPORTS,
week are ITC, TATAMTRDVR, ADANIPORTS, DISHTV and
SUNPHARMA, TATAMOTORS, ITC and COALINDIA.
ABIRLANUVO. On the other hand unwinding was visible in
Stocks with negative CoC are TATASTEEL, TECHM,
counters
like
IDEA,
INDUSINDBK,
INFRATEL,
TATAPOWER, AXISBANK and HEROMOTOCO.
HEROMOTOCO and POWERGRID.
Derivative Strategy
Scrip: RCOM
CMP : 51.20
Lot Size : 10000
Exercise Date (F & O) :
28th July 2016
View : Mildly Bullish
Strategy: Ratio Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
10000
RCOM
52.50
JULY
CE
2.50
47
(`0.50)
SELL
20000
RCOM
57.50
JULY
CE
1.00
50.5
(`0.50)
LBEP - `53.00/-
UBEP - `62.00 /-
54
`1.00
57.50
`4.50
Max. Risk: Unlimited
Max. Profit:
`45,000/-
If RCOM continues to move above UBEP.
If RCOM closes at `57.50/- on expiry.
61.00
`1.00
Profit can be booked before expiry if RCOM moves in favourable direction and time value decays.
64.50
(`2.50)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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