Technical and Derivatives Review | January 05, 2018
Inaugural week at record highs; but real interest remains outside index
Sensex (34154 ) / Nifty (10559)
Source: Trading View
Future outlook
Although, initial couple of days of the new calendar year was not so encouraging for our markets, we saw tremendous resilience at
lower levels and the Nifty managed to clock record highs towards the fag end of the inaugural week. This wouldn’t have been
possible without the participation of heavyweight ‘Banking’ basket, which finally woke up to propel the benchmarks at record highs.
It’s been a good start for our markets if we look at the weekly close well above the 10500 mark. Now, since we have entered an
uncharted territory, every uptick from hereon would be considered as a new high. But, certainly, if we just focus on index, especially
last 10 sessions’ move, it does not depict the right picture. The index remained in a slender range of 150 points, but the real interest
was seen outside the index. So many small size midcap counters literally flew in last 3-4 days along with selective ‘F&O’ stocks. We
have been quite vocal on this possibility that one should avoid scratching heads in the index and should rather focus on such
pockets. Going ahead, as far as index is concerned, we do not expect any major movement as we expect the index to remain
lethargic and see some profit booking in the zone of 10600 - 10630. On the flipside, 10500 followed by 10400 would be seen as a
crucial support zone.
Traders are repeatedly advised to stay light on index, continue focusing on stocks; but, now with a proper exit strategy. In fact,
momentum traders should keep monetizing their existing trades if they are making decent returns of 15% - 25% during the week
gone by.
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Technical and Derivatives Review | January 05, 2018
Mixed activity in index futures; focus on individual stocks
Nifty spot closed at 10558.85 this week, against a close of 10530.70 last week. The Put-Call Ratio has decreased to 1.62 from 1.58
levels and the annualized Cost of Carry is positive at 2.48%. The Open Interest of Nifty Futures increased by 9.78%.
Derivatives View
Nifty current month future closed with a premium of 14.35 points against a premium of 26.20 points to its spot. Next month future
is trading with a premium of 36.55 points.
PCR-OI has plunged from 1.62 to 1.58 on week on week basis. In call options, decent amount of build-up was seen in 10600 strike.
On the flip side, we witnessed open interest addition in 10200-10500 put options; wherein, huge positions were formed in 10400
strike. As a result, maximum open interest in put options shifted higher to 10400 from 10300 strike. At the same time, maximum
open interest concentration in call option is seen in 11000, followed by 10600 strike price.
We started off the inaugural week with the benchmark index hitting fresh record highs; however, mixed activity was witnessed in
index futures segment. Stronger hands formed decent shorts in index futures; as a result their index future ‘Long Short Ratio’ has
plunged from 70% to 56%. Meanwhile, they formed mixed positions in stock futures and index options. If we glance at options
activity, 10400 has highest OI concentration which may now act as a strong base for market. However, stock specific action may
continue; hence, we would advise traders to prefer stock specific approach.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
RNAVAL
30411000
94.08
57.50
15.93
BPCL
11223000
32.77
489.90
(4.92)
UBL
2553600
52.83
1157.00
6.56
IGL
6655000
23.34
331.50
(1.70)
ADANIPORTS
14285000
32.73
425.60
4.56
SREINFRA
19765000
23.22
98.55
(1.94)
PCJEWELLER
9888000
32.48
494.00
7.39
EICHERMOT
198875
19.27
29272.00
(3.98)
JETAIRWAYS
7530000
22.56
873.95
4.37
VGUARD
3663000
13.48
239.35
(2.33)
Weekly change in OI
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2
Technical and Derivatives Review | January 05, 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
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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