1
For Private Circulation Only
Technical and Derivatives Review
| February 5, 2021
Nifty reaches 15000 with fast and furious rally
Sensex (50732) / Nifty (14924)
Source: Trading View
Future outlook
The year 2020 was full of unprecedented things; but 2021 also seem to be following the similar footsteps. Fortunately, it surprised
us pleasantly as Finance Minister stood by her words and really presented ‘Like never before’ Union Budget on Monday. Since the
market had lightened up ahead of the event, market participants had all the reason to grab this opportunity with both hands and
hence, we could see a gargantuan move to clock probably biggest gains ever on the budget day. Market was not done yet, in fact the
exuberance level kept on rising as the week progressed to clock one of the biggest weekly gains to register new high tad above the
magical figure of 15000.
Who would have thought last weekend (especially after having a terrible week of trade), Nifty and other major indices would have
such a mesmerizing rally to reach record highs so soon. Many would be claiming now but practically, there would be hardly anyone
who could have anticipated this. Honestly, we expected Nifty to move towards 14000 14200 but not beyond considering the last
week’s price action. But the way it conquered 14200 with some authority, there was no doubt left after Monday’s session, we are
heading towards record highs. The real charioteer of this spellbinding move was the financial space. Some of the banking giants took
off this week as if there is no tomorrow. Now, markets have hastened towards their near term targets with this fast and furious rally
so soon. Hence, it would be interesting to see how it behaves in the forthcoming week. As far as levels are concerned, 15050
15200 15400 are the important Fibonacci levels in the upward direction; whereas on the lower side, 14700 14500 are to be seen
as key supports.
Although, the banking stocks have seen rarest weekly spurt this week, some profit booking was witnessed on Friday after a
marathon rally. This led to a formation of ‘Gravestone Doji’ pattern on the daily chart of BANKNIFTY. The said pattern needs
confirmation of price trading below the low of the candle i.e. 35545 in this case. If this happens then we would probably see some
profit booking in the forthcoming week. Traders should take a note of this and ideally it’s advisable to follow stock centric approach.
2
For Private Circulation Only
Technical and Derivatives Review
| February 5, 2021
Short covering and new longs leads Nifty to 15000
Nifty spot closed at 14924.25 this week, against a close of 13634.60 last week. The Put-Call Ratio has increased from 0.98 to 1.41.
The annualized Cost of Carry is positive at 0.78%. The Open Interest of Nifty Futures has increased by 1.28%.
Derivatives View
Nifty current month future closed with a premium of 22.50 points against a premium of 74.50 points to its spot. Next month future
is trading at a premium of 60.75 points.
In options segment, we witnessed some open interest addition in 15100-15500 call options. On the flipside, 14800-14500 put
options witnessed good amount of open interest addition. Maximum open interest for the weekly series in nearby options are
placed at 15500 call and 14500 put options.
After the recent corrective phase, the indices rallied sharply post the announcement of Budget due to a combination of short
covering as well as fresh long formation. The indices then continued to move higher throughout the week and Nifty tested the 15000
mark on the last day. The Banking index and its heavyweights saw long addition which led to its outperformance. FII’s were buyers in
cash segment but their net activity was muted in index futures. Majority of their positions are still on the long side with their ‘Long
Short Ratio’ over 62 percent. In last couple of sessions, stronger hands have preferred some profit booking and hence, next week
may not be as robust as the current one. The supports for coming week are placed around 14800 followed by 14600 whereas
resistance is seen around 15200. Traders are advised to trade with a stock specific approach and also book partial profits on existing
positions on rise and take some money off the table.
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
ICICIPRULI 8449500 72.16 473.90 (1.98)
ZEEL
38241000
56.92
215.80
(2.38)
ASIANPAINT
7290300
41.65
2389.35
(1.22)
- - - - -
- - - - -
Long Formati
on
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
BHEL 164115000 60.05 43.70 21.39
INDUSINDBK
24855300
45.02
1028.90
20.98
RAMCOCEM
1823250
33.15
876.90
12.28
DLF
32046300
32.39
306.60
19.25
SBIN
103200000
30.81
394.10
38.87
3
For Private Circulation Only
Technical and Derivatives Review
| February 5, 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