Technical Picks |
April 4, 2015
Bulls bounce back - Skeptical about further up move
Sensex (28260) / Nifty (8586)
Trading for the week kick started on a cheerful note on Monday
Exhibit 1: Nifty Weekly chart
owing to positive global cues. After a small pause, the Nifty
resumed with its early morning optimism and then went on to
post a massive intraday gain of 1.81% at closing. This was
followed by yet another positive start on Tuesday's session. Until
the penultimate hour, the Nifty traded with a positive bias; but
a vertical slide towards the fag end of the session pared down
all the intraday gains. The last trading session of this truncated
week, i.e. Wednesday, began on a quiet note. However, a strong
buying interest in the latter half pushed the Nifty well inside the
Source: Falcon
positive territory. Barring IT, all other sectors ended in the positive
Exhibit 2: Nifty Daily chart
territory with the Banking, Capital Goods, Oil & Gas, FMCG
and Healthcare counters being the major contributors to the
rally. The Nifty ended the concluded week with a massive
recovery of 2.94% over the previous week's closing.
Pattern formation:
„ The '89-day EMA' and the '89-week EMA' are placed at
28226 / 8524 and 24807 / 7448 levels, respectively.
„ The '20-day EMA' and the '20-week EMA' are placed at
28408 / 8617 and 28183 / 8509 levels, respectively.
Source: Falcon
Future outlook
around 8600 - 8650 levels. Thus, before we expect a further
Despite being a truncated week, the bulls completely out
bounce towards 8800 - 8850, we would first await a sustainable
powered the bears after seeing a sharp cut from the recent
move beyond the 8650 mark. Until then the possibility of
high. In-line with our view, the Nifty precisely respected the
retesting 8400 - 8300 becomes quite high. To summarize this,
strong support zone of 8280 - 8250, which is the lower end of
actionable point on the upside would be a breach of 8650 and
the weekly 'Megaphone' pattern. A decent bounce towards the
on the lower side, a move below Tuesday's low of 8454 may
8500 mark was also very much in line of our estimation as
bring back the pessimistic mood in the market. Considering
mentioned in the previous weekly report; but Wednesday's
above mentioned hypothesis, we would advise against being
extended move towards 8600 surprised us to an extent.
too aggressive in the market and recommend trading with a
However, we are still observing a cluster of resistance levels
proper exit strategy.
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Technical Picks |
April 4, 2015
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,388
27,824
28,061
28,497
28,735
NIFTY
8,301
8,444
8,523
8,666
8,746
BANKNIFTY
17,879
18,249
18,459
18,828
19,038
ACC
1,532
1,559
1,577
1,604
1,622
AMBUJACEM
246
254
258
265
269
ASIANPAINT
763
793
809
838
855
AXISBANK
540
555
564
579
588
BAJAJ-AUTO
1,975
1,998
2,021
2,043
2,066
BANKBARODA
153
161
166
174
178
BHEL
222
226
234
239
247
BPCL
724
764
791
831
858
BHARTIARTL
368
385
395
412
422
CAIRN
205
209
213
217
221
CIPLA
685
697
707
720
730
COALINDIA
339
351
359
370
378
DRREDDY
3,297
3,416
3,491
3,609
3,685
GAIL
367
376
383
392
399
GRASIM
3,488
3,591
3,658
3,762
3,829
HCLTECH
903
922
954
973
1,005
HDFCBANK
1,002
1,017
1,029
1,045
1,056
HDFC
1,246
1,292
1,317
1,362
1,387
HEROMOTOCO
2,521
2,588
2,629
2,697
2,738
HINDALCO
124
128
131
135
139
HINDUNILVR
840
862
874
896
908
ICICIBANK
309
316
320
327
331
IDEA
164
177
184
197
203
IDFC
163
168
171
176
178
INDUSINDBK
857
891
910
944
963
INFY
2,086
2,130
2,202
2,246
2,318
ITC
315
324
328
337
342
KOTAKBANK
1,262
1,312
1,340
1,390
1,418
LT
1,658
1,696
1,722
1,760
1,785
LUPIN
1,929
1,983
2,014
2,068
2,099
M&M
1,163
1,183
1,198
1,217
1,232
MARUTI
3,510
3,577
3,667
3,735
3,825
NMDC
120
125
129
133
137
NTPC
143
145
148
150
153
ONGC
294
300
310
316
326
POWERGRID
142
144
146
148
149
PNB
140
146
149
155
159
RELIANCE
781
809
824
851
866
SSLT
180
185
191
196
201
SBIN
259
266
270
278
282
SUNPHARMA
976
1,029
1,061
1,114
1,146
TCS
2,494
2,518
2,544
2,568
2,594
TATAMOTORS
519
542
554
577
589
TATAPOWER
72
75
76
79
81
TATASTEEL
310
317
322
328
333
TECHM
601
617
635
651
669
ULTRACEMCO
2,730
2,807
2,887
2,964
3,045
WIPRO
608
621
629
641
649
YESBANK
793
820
836
863
879
ZEEL
333
337
341
345
349
Technical Research Team
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Derivatives Review |
April 4, 2015
Market may not give up recent gains easily
Nifty spot closed at 8586.25 this week against a close of 8570.90 last week. The Put-Call Ratio has increased from 0.83 to 0.96 levels
and the annualized Cost of Carry is positive at 6.87%. The Open Interest of Nifty Futures decreased by 11.30%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.83 to 0.96 levels mainly due to
Implied Volatility (IV) for NIFTY has decreased from 14.77%.to
significant buildup in put options. 8300-8600 strikes of put
13.85%. Historical volatility (HV) of NIFTY is at 19.29% and
options added reasonable open interest; some buildup was
that for BANKNIFTY is trading at 30.44%. Liquid counters having
also seen in 8000-8200 put options last week. On the other
very high HV are HEXAWARE, SAIL, AMTEKAUTO, INFY and
hand in call options some buildup was seen in 8800 & 9000
WIPRO. Stocks where HV are on lower side are HDIL, RELINFRA,
strike prices. Maximum buildup in current series is seen in 9000
ADANIPOWER, JISLJALEQS and RELCAPITAL.
call & 8400 put options.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 46.85 points
`1,75,438/- cr. to `1,88,878/- cr. Stock futures open interest
against the premium of 93.50 points to its spot. Next month
has increased from `64,004/- cr. to `65,237/- cr. Large cap
future is trading with premium of 93.85 points. Liquid counters
names which added significant positions last week are BPCL,
where CoC is high are UNITECH, JPASSOCIAT, IRB, JPPOWER
CIPLA, INFY, TATAMOTORS and BHEL. On the other hand
and RPOWER. Stocks with negative CoC are SAIL, GODREJIND,
unwinding was visible in counters like ITC, DRREDDY, LT,
BHEL, BIOCON and NMDC.
ULTRACEMCO and SBIN.
Derivative Strategy
Scrip : MARUTI
CMP : `3671.30
Lot Size : 125
Exercise Date (F & O) :
30th. Apr 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
(`)
(`)
Profit/Loss
BUY
125
MARUTI
3600
APR
PE
40.00
3325
(`79.00)
SELL
250
MARUTI
3500
APR
PE
18.00
3400
(`4.00)
LBEP
-
`3404.00
UBEP - `3596.00
3475
`71.00
3550
`46.00
Max. Risk: Unlimited
Max. Profit: `12,000/-
If MARUTI continues to move below LBEP.
If MARUTI closes at `3500/- on expiry.
3625
(`4.00)
NOTE: Profit can be booked before expiry if MARUTI moves in favorable direction and time value decays.
3700
(`4.00)
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Weekly
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E-mail: [email protected]
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Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15