Technical and Derivatives Review | November 03, 2017
Key levels now at 10482 - 10500
Sensex (33686) / Nifty (10453)
Source: Trading View
Future outlook
Last week’s decent up move was followed by a flat opening in our markets this Monday. The index consolidated for first couple of
days around the 10300 mark. However, we witnessed a smart move on Wednesday mainly bolstered by India’s jump to 100th place
(notches up by 30 from last year) in World Bank’s Ease of Doing Business rankings. As a result, the Nifty reached yet another
milestone of 10400 during the midst of the week.
With reference to previous article, we expected index to march towards the 161% (Golden Ratio) reciprocal retracement level
(10482) of the recent down move. Yes, there is no sign of weakness on charts; but, considering the importance of this Fibonacci
ratio, we advise some profit booking around it. Although, the recent underperformance from the banking index came to end this
week after Bank Nifty soaring to record highs on Wednesday, we would expect some consolidation in our benchmark indices now.
For the coming week, 10482 - 10500 levels would be closely watched in the upward direction; whereas, the immediate support lies
in the range of 10383 - 10311. At this juncture, traders are advised not to take aggressive positions and should rather keep focusing
on individual stocks with a proper exit strategy. As far as sectoral view is concerned, we would expect ongoing buzz to continue in
‘Pharmaceutical’ as well as ‘PSU’ banking space. One should also keep a close track of ‘Midcap IT’ counters that are likely to do well
in the forthcoming week.
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Technical and Derivatives Review | November 03, 2017
PCR-OI on the higher side, stay light
Nifty spot closed at 10452.50 this week, against a close of 10323.05 last week. The Put-Call Ratio has increased to 1.55 from 1.38 levels and
the annualized Cost of Carry is positive at 4.44%. The Open Interest of Nifty Futures increased by 14.11%.
Derivatives View
Nifty current month future closed with a premium of 34.30 points against a premium of 33.80 points to its spot. Next month future is
trading with a premium of 73.20 points.
PCR-OI has increased from 1.38 to 1.55 on week on week basis; due to good amount of build-up in put options. In call options, except for
some build-up in 10800 and 10900 strikes we hardly saw relevant action. On the flip side, 10000-10400 put options added meaningful
positions in the preceding week. For November series, maximum open interest concentration is placed at 10500 followed by 10400 call
option and for put option stands at 10000 followed by 10200 strike.
In the week gone by, Nifty rallied 1.25% with good amount of fresh long addition. At the same time, long positions formed in October series
are also intact in the system. However, we witnessed FIIs shorting index futures last week and they also bought index put options. Now,
their index futures ‘Long Short Ratio’ has plunged to 63% from 70%. Considering above data, we would advise traders to lightener their
positions in index and focus on individual stocks to fetch higher returns.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
JETAIRWAYS
7220400
41.44
627.15
18.55
UPL
10731600
36.49
780.70
(6.44)
UJJIVAN
8322000
18.55
375.95
14.93
CANFINHOME
4737500
14.54
470.90
(5.44)
UBL
2371600
65.51
1131.10
13.73
MCX
2067500
20.55
1018.70
(5.10)
INDIANB
4936000
29.08
349.65
13.34
BERGEPAINT
1588400
26.22
261.80
(4.94)
IBREALEST
49175000
16.17
232.05
12.43
M&M
4527500
13.63
1338.35
(3.99)
BANKINDIA
13446000
11.83
201.55
11.69
PFC
52620000
22.85
137.10
(3.52)
TITAN
7528500
27.10
662.35
11.43
FEDERALBNK
78336500
12.49
116.80
(3.51)
BHARTIARTL
40835700
32.90
543.95
11.19
TECHM
12832700
13.60
464.65
(3.19)
Weekly change in OI
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Technical and Derivatives Review | November 03, 2017
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
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E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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