Technical and Derivatives Review | August 03, 2018
Keep using declines, further legs to unfold
Sensex (37556 ) / Nifty (11361)
Source: Trading View
Future outlook
The merry days continues for our market after undergoing some stressful period of nearly five months. Unlike previous week, the
intra-week action was not as smooth as it was; but as we generally say all is well that ends well. Index managed to reclaim the 11350
mark with an authority; bringing the smile back on lot of retail investors.
With a technical point of view, the rally began after breaking out from a ‘Bullish Diamond’ pattern on weekly chart during the mid-
July. Since then a series of bullish price developments have been observed. Some would say markets are overbought but we do not
want to be in this bandwagon as of now. The structure is still strong and if we meticulously observe, some of the previous laggards
have started to participate like, ICICI Bank, Axis Bank and PSBs. In addition, we had opined about midcap index probably showing
signs of forming a base. The anticipation has now turned into a confirmation and hence, we believe that there is still lot more to
offer in days to come. Friday’s strong rally is the perfect example why one should refrain shorting this market at this juncture, rather
capitalize such declines to buy into.
As far as levels are concerned, it’s a matter of time, we are likely to hasten towards 11430 - 11500 and since it’s an uncharted
territory, further legs will keep unfolding as we move forward. For the forthcoming week, 11290 followed by 11234 would be seen
as immediate support. One notable observation to sum it up, during the week, lot of stocks from the cash segment started to show
some life and is poised for decent moves. One can look to target such potential candidates which may offer better trading
opportunities.
For Private Circulation Only
1
Technical and Derivatives Review | August 03, 2018
Unwinding in calls hints further upside
Nifty spot closed at 11360.80 this week, against a close of 11278.35 last week. The Put-Call Ratio has increased from 1.71 to 1.73
and the annualized Cost of Carry is positive at 4.16%. The Open Interest of Nifty Futures increased by 15.43%.
Derivatives View
Nifty current month future closed with a premium of 34.95 points against a premium of 28.35 points to its spot. Next month future
is trading with a premium of 58.75 points.
As far as Nifty options activities for the week are concerned, we saw fresh build-up in 11400, 11600 and 11700 call options. On the
flip side, fresh writing was seen in 11000, 11200 and 11300 put options. At current juncture, 11500 call and 11000 put options are
attracting trader’s attention.
Last week, we saw extension of the ongoing rally towards 11400 mark; but some profit booking was seen in the midst of the week on
account of rise in repo rates. Strong recovery on Friday’s session led to weekly closing with 0.79% gain. During the week, we witnessed
good amount of long formations in Nifty; whereas, short covering took place in case of BankNifty. Stronger hands formed mixed positions in
index futures along with decent longs in stock futures segment. On Friday, we saw massive writing in 11200 and 11300 put strikes followed
by unwinding in 11400-11500 call options. Considering the above data points, we expect continuation of ongoing momentum towards
11450-11500 in the near term.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
PCJEWELLER
10300500
31.15
94.75
11.60
CANFINHOME
4411250
12.82
337.75
(9.24)
CHENNPETRO
1885500
18.81
312.55
11.05
EICHERMOT
284225
26.17
27117.75
(6.20)
RCOM
109928000
26.32
15.70
10.95
RAYMOND
5149600
10.53
808.70
(5.81)
DIVISLAB
2574400
16.85
1211.65
9.40
CASTROLIND
10732400
21.30
163.15
(5.75)
TORNTPHARM
707000
30.56
1628.90
9.09
RAMCOCEM
1097600
25.87
683.00
(4.49)
Weekly change in OI
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2
Technical and Derivatives Review | August 03, 2018
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
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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