For Private Circulation Only
Technical and Derivatives Review
| October 03, 2020
A crucial junction around 11475-11550
Sensex (38697) / Nifty (11417)
Source: Trading View
Future outlook
It’s been a roller coaster ride for our markets in last couple of weeks. Last week, September expiry panned out at the lowest point of
the series and from the next session immediately, market started rebounding sharply. The same momentum carried over to this
week to head towards 11300 first. In the midst, Nifty looked a bit tentative around it but on Thursday, it just blew out to reclaim
11400 convincingly.
In last five sessions, markets almost had v-shaped recovery and within no time, we are off last Thursday’s lows more than 600
points, which is remarkable. This rally was mainly triggered by strong positive cues from the global peers and there was no negative
development on the domestic front. Honestly speaking, this sharp up move has surprised us to some extent, especially the upsurge
on Thursday to surpass the barrier of 11300. Markets are superior and there is no harm accepting the miss. Now, we are standing at
a crucial juncture, where we can see a converging point of two important trend lines. If we connect recent swings highs and swing
lows, two trend lines are converging around 11475-11550. If these levels are taken out, this will certainly negate the bearish stance
and then can head higher. But till the time it’s not crossed convincingly, we are still not completely out of the woods.
So first half of the forthcoming week would be crucial as it would decide the next path of action for our market. On the lower side,
11300-11180 has now become an immediate support zone. The weakness will get confirmed only below these points. This week,
banking had a spectacular come back and it’s very vital in determining the trend of the markets in the near term. Traders are advised
to keep a note of all the mentioned levels and should create aggressive bets only after the confirmation of any of the above
For Private Circulation Only
Technical and Derivatives Review
| October 03, 2020
Nifty moves higher on long formations
Nifty spot closed at 11416.95 this week, against a close of 11050.25 last week. The Put-Call Ratio has increased from 1.37 to 1.57.
The annualized Cost of Carry is positive at 2.12%. The Open Interest of Nifty Futures has increased by 22.36%.
Derivatives View
Nifty current month future closed with a premium of 18.60 points against a discount of 8.05 points to its spot. Next month future is
trading at a premium of 40.15 points.
As far as Nifty options activities are concerned, some open interest build up was seen in 11000-11400 call options and 11400-11000
put options. Maximum open interest for the weekly series is placed at 11500 call and 11200 put option.
The indices started the week with a gap up opening and rallied higher to end with gains of over 5 percent in Nifty and 6 percent in
Bank Nifty. While Nifty started the October series with low open interest base, good amount of long formation was seen during the
week. Bank Nifty had short position in the system and thus, short covering was seen there. FII’s formed long position in the index
futures segment and their ‘Long Short Ratio’ has increased from 54 percent to 66 percent. To summarize above data, long formation
in Nifty, short covering in Bank Nifty and fresh long addition by the stronger hands led the market higher. As per the options data,
11500 is the immediate resistance for the coming week while 11200 is seen as the support. Traders are advised to keep a tab on the
developments at the start of the week and trade accordingly.
Weekly change in OI
Short Formation
Chg (%)
CONCOR 7274202 31.28 357.90 (5.18)
Long Formation
Chg (%)
MFSL 2173600 54.96 621.05 4.02
For Private Circulation Only
Technical and Derivatives Review
| October 03, 2020
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]ng.com
Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jai[email protected].com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]ng.com
Sneha Seth Derivatives Analyst [email protected]gelbroking.com