Technical and Derivatives Review | May 04, 2018
10800 remain to be a sturdy wall
Sensex (34915 ) / Nifty (10618)
Source: Trading View
Future outlook
Last Friday, we saw index touching 10700 after traversing the stiff hurdle of 10640 with an upside gap. This development set the
tone for a move towards the next important junction of 10800. Index obliged this move and started its journey towards it in the
initial part of the week. However, suddenly traders looked a bit skeptical and started liquidating their longs in a rush (especially in
high beta midcaps) during the second half of the week. This resulted into some nervousness in the market and hence, index
corrected back to test the 10600 mark.
Finally, after five weeks’ of relentless run, the winning streak came to end and it was very much on cards after hastening towards
10800. If we refer to our intra-week articles, we have been quite vocal on the possibility of some profit booking taking place after
entering the 10750 - 10800. However, the velocity at which few counters took it on the chin was slightly surprising to us. Now,
index is trading around its recent breakout points and hence, a possibility of some bounce back towards 10700 - 10720 cannot be
ruled out. Considering the multiple Fibonacci ratios in the zone of 10700 - 10800, we are still a bit unsure whether market has
enough strength to surpass 10800 convincingly in the same run. Hence, one need to keep booking timely profits and should ideally
avoid taking undue risks. Meanwhile, if it keeps gyrating in the mentioned range of 10600 - 10800, the ideal strategy would be to
concentrate on individual stocks.
Going ahead, 10530 - 10500 would be seen as a make or break support zone. Any sustainable move below this crucial junction
would reverse the short term tide and in that case, lower levels can be expected in the near term. Hence, going ahead, traders needs
to very agile now and it’s advisable to keep a close eye on all these key points we have just alluded in the above section.
For Private Circulation Only
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Technical and Derivatives Review | May 04, 2018
No meaningful change in data
Nifty spot closed at 10618.25 this week, against a close of 10692.30 last week. The Put-Call Ratio has decreased from 1.52 to 1.49
and the annualized Cost of Carry is positive at 5.16%. The Open Interest of Nifty Futures increased by 1.51%.
Derivatives View
Nifty current month future closed with a premium of 40.50 points against a premium of 31.50 points to its spot. Next month future
is trading with a premium of 51.25 points.
As far as Nifty options active for a week is concerned, we saw fresh open interest addition in 10800-11000 and 11200 call options.
On the flip side, 10400-10700 strikes of put options were most active and they also added fresh positions. Maximum concentration
for May series stands at 11000 call and 10500 put options.
The benchmark Nifty rallied towards the resistance zone of 10750-10800 mark; but due profit booking at higher levels failed to hold on the
momentum. Eventually, index concluded the first week of May series with a cut of 0.61%. In index futures front, we hardly saw any relevant
open interest activity. However, FIIs formed mixed positions in index futures along with shorting in stock futures. At present, the earlier
resistance of 10600-10630 should now act as a support for market. At present, traders are advised to remain light in index unless it remains
in the range of 10600-10800 levels and focus on individual counters for near term.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
NCC
30336000
7.76
133.50
4.22
HCC
48603000
23.67
18.55
(19.35)
KOTAKBANK
14768000
12.65
1239.15
4.11
JETAIRWAYS
8719200
22.47
513.65
(18.18)
MANAPPURAM
17466000
9.48
127.20
4.05
INDIGO
4311600
39.43
1185.65
(15.30)
CONCOR
1463750
22.81
1372.95
3.78
SREINFRA
17492000
15.88
81.00
(12.76)
UJJIVAN
6176000
18.19
422.50
3.45
HEXAWARE
6997500
73.36
377.65
(12.37)
Weekly change in OI
2
Technical and Derivatives Review | May 04, 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
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