For Private Circulation Only
Technical and Derivatives Review
| June 04, 2021
Benchmark remains quiet, broader market continue to roar
Sensex (52100) / Nifty (15670)
Source: Trading View
Future outlook
We had a flat start to the week on Monday and in fact, in the initial trade, there was some mild negativity seen in the market. But
similar to the recent trend, market absorbed the pressure and then resumed its upward momentum, once again led by the giant
RELIANCE. As the day progressed, the buying momentum continued to first reach the new milestone of 15500 and in the final hour
15600 became the reality as well. Eventually, the Nifty ended the session with nearly a percent gains. After a brief pause on the
subsequent day, the Nifty continued its northward march to hit fresh record highs beyond 15700 during the latter half of the week
to conclude with one and half a percent gains.
The kind of price action we have been witnessing since few days, the commentary would sound a bit repetitive because there is
nothing different to talk about. As we have been mentioning, every 100 points upside level should be treated as an immediate
resistance and now this level comes at 15800. Ideally considering the Fibonacci ratios, we do not see any major hurdle before 16000
and hence, even if this has to be met in the near term, the move would continue to be slow and steady in nature. One of the
favourable factors is the significant drop in INDIA VIX which is back to the pre-COVID levels; bodes well for the bulls. On the flipside,
15600 15525 15450 are to be seen as key support levels. Only a handful of index heavyweights are giving some notable moves,
otherwise the real action still continues in the broader end of the spectrum. Stocks from the cash segment are literally roaring and
thus it’s advisable to stick to this approach.
We reiterate when market moves in such typical manner, it’s better not to get complacent and one should take one step at a time.
Also, it would be a prudent strategy to avoid aggressive leveraged bets (especially overnight) because any in between hiccup may
spoil your short term trading journey.
For Private Circulation Only
Technical and Derivatives Review
| June 04, 2021
FII’s continue with their bullish bets as Nifty hits new records
Nifty spot closed at 15670.25 this week, against a close of 15435.65 last week. The Put-Call Ratio has decreased from 1.32 to 1.30.
The annualized Cost of Carry is positive at 3.56%. The Open Interest of Nifty Futures increased by 3.52%.
Derivatives View
Nifty current month future closed with a premium of 28.75 points against a premium of 42.35 points to its spot. Next month future
is trading at a premium of 88.75 points.
In options segment, the open interest addition was seen in 15800-16000 call options while 15500-15400 puts too witnessed open
interest addition. Maximum build-up in the weekly series is placed in 15700 call and 15500 put options.
Nifty stated the week on a positive note and surpassed 15600 mark. Post some consolidation for a couple of sessions, the index
resumed the momentum on the upside and managed to end the week tad below 15700, with weekly gains of one and a half percent.
During the week, both Nifty as well as Bank Nifty witnessed some long formations. FII’s continue with their bullish positions in the
index futures and their ‘Long Short Ratio’ currently stands at 82 percent. The options data hints at a support in the range of 15500-
15400 while 15800 followed by 16000 would be the levels to watch on the upside in the coming week. Hence, traders are advised to
continue to trade with a positive bias and look for buying opportunities on declines.
Weekly change in OI
Short Forma
Chg (%)
ITC 190787200 28.61 204.40 (3.88)
Long Formation
Chg (%)
IBULHSGFIN 39339000 62.88 262.90 17.10
For Private Circulation Only
Technical and Derivatives Review
| June 04, 2021
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]g.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