October 3, 2015
Technical Picks |
Market nearing crucial resistance - 8055 to decide short term trend !!
Sensex (26221) / Nifty (7951)
In the truncated week gone by, the Nifty started off trading on
Exhibit 1: Nifty Weekly chart
Monday with marginal gains. But the index sold off all its
opening gains and formed a 'Bearish Engulfing' pattern, ahead
of the RBI Monetary Policy announcement. On Tuesday, at the
opening, the market witnessed negative momentum, drawing
weakness from global indices. However, the softness was only
until the announcement of the RBI Monetary Policy late in the
morning; with the RBI announcing a surprise 50 bps cut in the
repo rate against an anticipation of a 25 bps cut, the market
participants were obliged to take the news on a positive note,
Source: Falcon
leading the Nifty higher. The Nifty traded the remaining sessions
Exhibit 2: Nifty Daily chart
of the week on a positive note as well. On the sectoral front,
the gains were led by Consumer Durables, Realty and FMCG
stocks; whereas, the Metal and Banking index ended the week
with the marginal losses. The Nifty ended the concluded week
with the gains of 1.05% over the previous week's close.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
26902 / 8157 and 25916 / 7815 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
Source: Falcon
25992 / 7900 and 26980 / 8180 levels, respectively.
does not show any 'Impulsive' characteristics and thus we believe
that it is just a pullback rally within the corrective downtrend.
Future outlook
Thus, 8055 seems to be a trend deciding level for the near
The concluded week witnessed volatility owing to RBI monetary
term, and until the same is crossed, traders should trade in line
policy and ongoing global uncertainty. The price action of last
with the broader trend and should be vigilant to create
month has led to the formation of an 'Inverted Head & Shoulders'
aggressive long positions. The failure of the 'Inverted Head &
pattern on the daily charts. The said pattern is a trend reversal
Shoulders' pattern and resumption of the corrective move could
pattern which possibly implies positive momentum, but that
be catastrophic and the Nifty could then move lower towards
would be the case only if the Nifty sustains above the neckline
7650-7700 levels in the near term. However, if the Nifty crosses
resistance of 8055. However, if we observe the higher degree
8055 in the week ahead, then it can possibly move upto its
weekly chart, the Nifty had earlier formed a broader 'Head &
next resistance zone which is seen around 8157 (89EMA
Shoulders' pattern from which it had given a breakdown in the
on daily charts) to 8225 (higher end of the gap area of
last week of August. The ongoing up move thus seems to be
24 August 2015).
just a pullback move if traced on the basis of the weekly charts.
Also, the recent up move in the Nifty from the lows of 7539.50
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October 3, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,836
25,528
25,980
26,673
27,124
NIFTY
7,566
7,759
7,883
8,076
8,201
BANKNIFTY
16,274
16,712
17,087
17,525
17,900
ACC
1,273
1,318
1,347
1,392
1,420
AMBUJACEM
191
200
206
215
220
ASIANPAINT
754
797
823
866
892
AXISBANK
464
480
501
517
538
BAJAJ-AUTO
2,160
2,238
2,282
2,360
2,405
BANKBARODA
173
177
183
187
194
BHEL
184
192
200
207
215
BPCL
810
833
866
888
922
BHARTIARTL
307
323
332
348
357
BOSCH LIMITED
18,169
18,738
19,652
20,221
21,135
CAIRN
139
146
151
158
163
CIPLA
613
623
639
649
664
COALINDIA
290
309
320
339
349
DRREDDY
3,871
4,052
4,151
4,332
4,431
GAIL
269
281
296
308
324
GRASIM
3,303
3,416
3,493
3,606
3,683
HCLTECH
739
798
894
953
1,049
HDFCBANK
1,005
1,036
1,057
1,088
1,108
HDFC
1,106
1,151
1,198
1,243
1,289
HEROMOTOCO
2,224
2,318
2,395
2,489
2,567
HINDALCO
65
68
70
73
76
HINDUNILVR
762
789
808
836
855
ICICIBANK
249
258
266
275
283
IDEA
130
140
147
157
164
INDUSINDBK
879
918
941
980
1,003
INFY
1,056
1,114
1,156
1,215
1,256
ITC
310
319
327
336
343
KOTAKBANK
606
623
642
659
677
LT
1,383
1,437
1,466
1,519
1,548
LUPIN
1,902
2,005
2,067
2,170
2,231
M&M
1,166
1,208
1,244
1,286
1,321
MARUTI
4,307
4,444
4,604
4,740
4,900
NMDC
86
90
93
97
100
NTPC
116
120
123
127
130
ONGC
212
222
228
238
244
POWERGRID
121
126
130
135
139
PNB
127
129
134
137
141
RELIANCE
807
836
855
884
903
SBIN
224
230
238
243
251
SUNPHARMA
821
856
875
911
930
TCS
2,541
2,593
2,621
2,673
2,702
TATAMOTORS
268
283
294
308
319
TATAPOWER
62
64
65
67
69
TATASTEEL
191
202
210
221
229
TECHM
516
539
561
584
606
ULTRACEMCO
2,561
2,667
2,729
2,835
2,897
VEDANTA
74
79
87
92
101
WIPRO
571
585
599
614
628
YESBANK
677
703
729
754
780
ZEEL
368
384
394
410
420
Technical Research Team
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Derivatives Review |
Resistance of 8050-8100 is in place
Nifty spot closed at 7950.90 this week against a close of 7868.50 last week. The Put-Call Ratio has decreased from 0.93 to 0.91
levels and the annualized Cost of Carry is positive at 4.27%. The Open Interest of Nifty Futures increased by 6.28%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.93 to 0.91 levels. Being start of
Implied Volatility (IV) for NIFTY has decreased from 19.03% to
new series the overall build-up is quite scattered. Huge buildup
17.60%. Historical volatility (HV) of NIFTY is at 24.58% and
was visible in 7900-8500 call and 7500-8000 put options last
that for BANKNIFTY is trading at 34.20%. Liquid counters having
week. Maximum buildup in current series is seen in 8300 call
very high HV are HCLTECH, IDFC, DRREDDY, IDEA and
& 7500 put options. The immediate resistance for Nifty is
HINDUNILVR. Stocks where HV are on lower side are
8050-8100 levels and we don't expect major upside from these
AMTEKAUTO, SRF, ANDHRABANK, CANBK and UCOBANK.
levels.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 26.05 points
`1,59,358/- cr. to `1,90,872/- cr. Stock futures open interest
against a premium of 27.20 points to its spot. Next month
has increased from `52,225/- cr. to `55,991/- cr. Liquid
future is trading with premium of 62.50 points. Liquid counters
counters names which added significant positions last week
where CoC is high are IDFC, HEROMOTOCO, BANKBARODA,
are AXISBANK, HEROMOTOCO, ULTRACEMCO, VEDL and DLF.
ONGC and HDFC. Stocks with negative CoC are CAIRN, DLF,
On the other hand unwinding was visible in counters like IDFC,
INFY, INDUSINDBK and NMDC.
BHEL, MARUTI, POWERGRID and RELIANCE.
Derivative Strategy
Scrip : SBIN
CMP : `236.65
Lot Size : 1000
Exercise Date (F & O) :
29th. Oct 2015
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
(Rs)
(Rs)
Profit/Loss
BUY
1000
SBIN
230
OCT
PE
6.00
205
(`5.00)
SELL
2000
SBIN
220
OCT
PE
3.00
212
`2.00
BEP
-
`210/-
219
`9.00
Max. Risk: Unlimited
Max. Profit: `10,000/-
226
`4.00
If SBIN continues to move below BEP.
If SBIN closes at 220 levels on expiry.
233
0.00
NOTE: Profit can be booked before expiry if SBIN moves in favorable direction and time value decays.
240
0.00
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