Technical Picks |
July 4, 2015
Bulls stand firm despite global uncertainty
Sensex (28093) / Nifty (8485)
Trading for the week began with a sharp cut of more than
Exhibit 1: Nifty Weekly chart
130 points on the Nifty on Monday, on account of rising
concerns over the crisis in Greece. The index further extended
its losses in the first half of the day, but a smart recovery during
the latter half trimmed a major portion of losses, leading the
index to close above the 8300 mark. This was followed by
extended recovery throughout the remaining part of the week;
the Nifty finally closed the week at its three month high level.
Barring nominal losses from IT, Metal, and Realty stocks, all
other sectoral indices managed to close in the positive territory.
Source: Falcon
The Banking, Capital Goods, Consumer Durables, FMCG and
Exhibit 2: Nifty Daily chart
Oil & Gas stocks were the major contributors to the week's
rally. The Nifty added 1.24% over the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27638 / 8357 and 25557 / 7691 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
27496 / 8315 and 27687 / 8372 levels, respectively.
Future outlook
Source: Falcon
Trading for the week took off on a negative note on Monday as
weekly 'Lower Top Lower Bottom' structure has now been
turmoil in global markets spooked the domestic market to a
nullified. In fact, the weekly chart now exhibits a breakout from
great extent. But fortunately, the Nifty managed to find a strong
the 'Downward Sloping Channel' along with the positive
support around the 50% Fibonacci retracement level of the
crossover of the 'RSI-Smoothened' momentum oscillator.
recent up move from 7940.30 to 8423.15. Despite extreme
Considering these evidences and the ongoing momentum in
uncertainly across the globe, the Nifty gave a v-shaped recovery,
most of the heavyweight constituents, a move beyond the 8500
putting on nearly 300 points from the low of 8195.65 in just a
mark on the Nifty looks convincingly possible. We expect this
few sessions. This clearly indicates that our markets have
up move to extend towards 8600 - 8650 in the coming week.
completely shrugged off the uncertainty related to Greece; the
On the flipside, 8350 would now be seen as a crucial and
Nifty closed the week a tad below the 8500 mark. A crucial
important support level for the Nifty. We advise against shorting
resistance stood at 8489.55 (weekly high on May 22, 2015)
this market and suggest trading with a stock centric approach.
on the Nifty, which has now been broken. Thus, the current
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Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
26,837
27,392
27,763
28,318
28,690
NIFTY
8,091
8,288
8,393
8,590
8,695
BANKNIFTY
17,501
18,115
18,436
19,050
19,371
ACC
1,335
1,407
1,447
1,518
1,558
AMBUJACEM
212
227
235
250
258
ASIANPAINT
709
741
760
792
810
AXISBANK
531
558
573
601
616
BAJAJ-AUTO
2,431
2,509
2,559
2,638
2,688
BANKBARODA
132
141
147
156
162
BHEL
235
247
255
267
274
BPCL
828
866
890
927
952
BHARTIARTL
394
415
426
447
459
BOSCH LIMITED
19,996
21,492
22,496
23,992
24,996
CAIRN
172
178
183
188
193
CIPLA
585
608
624
647
662
COALINDIA
386
402
415
431
445
DRREDDY
3,361
3,474
3,541
3,655
3,721
GAIL
372
379
390
397
408
GRASIM
3,204
3,356
3,452
3,603
3,700
HCLTECH
890
928
948
986
1,006
HDFCBANK
1,004
1,039
1,058
1,093
1,111
HDFC
1,237
1,276
1,300
1,339
1,363
HEROMOTOCO
2,469
2,523
2,554
2,608
2,639
HINDALCO
106
108
112
114
117
HINDUNILVR
846
885
907
947
969
ICICIBANK
295
305
310
320
325
IDEA
162
172
178
188
194
INDUSINDBK
819
856
878
916
938
INFY
967
979
992
1,004
1,017
ITC
299
307
312
321
326
KOTAKBANK
1,292
1,360
1,411
1,479
1,529
LT
1,678
1,743
1,784
1,849
1,890
LUPIN
1,755
1,828
1,873
1,946
1,992
M&M
1,238
1,275
1,303
1,340
1,367
MARUTI
3,888
3,943
4,017
4,072
4,145
NMDC
112
115
117
120
122
NTPC
134
136
138
141
142
ONGC
300
304
311
316
322
POWERGRID
135
138
141
144
146
PNB
125
134
138
147
152
RELIANCE
952
980
1,000
1,027
1,047
SBIN
249
259
265
275
281
SUNPHARMA
814
843
865
893
915
TCS
2,515
2,559
2,585
2,629
2,655
TATAMOTORS
404
418
433
448
462
TATAPOWER
70
72
74
76
77
TATASTEEL
277
289
300
312
323
TECHM
435
453
485
504
536
ULTRACEMCO
2,736
2,900
2,990
3,154
3,243
VEDANTA
165
168
173
176
181
WIPRO
531
540
550
560
570
YESBANK
804
838
858
892
912
ZEEL
337
353
362
379
388
Technical Research Team
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Derivatives Review |
FIIs forming longs in Index Future
Nifty spot closed at 8484.90 this week against a close of 8381.10 last week. The Put-Call Ratio has increased from 1.01 to 1.11 levels
and the annualized Cost of Carry is positive at 0.49%. The Open Interest of Nifty Futures increased by 26.77%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 1.01 to 1.11 levels mainly due to
Implied Volatility (IV) for NIFTY has increased from 14.48% to
open interest addition in put options. Huge buildup was visible
14.92%. Historical volatility (HV) of NIFTY is at 16.85% and
in 8500-8800 call options last week. On the other hand in put
that for BANKNIFTY is trading at 23.05%. Liquid counters having
options 8000-8500 strike prices added significant buildup. We
very high HV are UBL, IGL, CEATLTD, SAIL and IBULHSGFIN.
believe Nifty may stow strength but we would suggest to wait
Stocks where HV are on lower side are LICHSGFIN, UNITECH,
till we see reasonable amount of buying above 8500 levels.
ADANIENT, SUNTV and GAIL.
Maximum buildup in current series is seen in 9000 call & 8500
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 3.10 points
`1,63,961/- cr. to `1,97,932/- cr. Stock futures open interest
against a premium of 0.55 points to its spot. Next month future
has increased from `53,864/- cr. to `57,793/- cr. Liquid
is trading with premium of 38.75 points. Liquid counters where
counters names which added significant positions last week
CoC is high are RELIANCE, CIPLA, COALINDIA, LT and
are TECHM, KOTAKBANK, AMBUJACEM, WIPRO and
MARUTI. Stocks with negative CoC are TATASTEEL, CAIRN,
COALINDIA. On the other hand unwinding was visible in
BAJAJ-AUTO, IDFC and TATAPOWER.
counters like CAIRN, BANKBARODA, NTPC, SUNPHARMA and
MARUTI.
Derivative Strategy
Scrip : RELIANCE
CMP : `1012.25
Lot Size : 250
Exercise Date (F & O) :
30th. July 2015
View: Mildly Bullish
Strategy: Ratio Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
250
RELIANCE
1000
JULY
CE
30.00
975
0.00
SELL
500
RELIANCE
1040
JULY
CE
15.00
1000
0.00
BEP
-
`1080/-
1025
`25.00
Max. Risk: Unlimited
Max. Profit: `10,000/-
1050
`30.00
If RELIANCE continues to move on or above BEP on expiry.
If closes at Rs. 1040 level on expiry.
1075
`5.00
1100
(`20.00)
NOTE: Profit can be booked before expiry if RELIANCE moves in favorable direction and time value decays.
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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)