Technical and Derivatives Weekly Review - June 5, 2023

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Technical and Derivatives Review |June 05, 2023

Markets failed to capitalise on head-start, undertone remains bullish

Sensex (62547) / Nifty (18534)

Source: Tradingview.com

Future outlook

Our markets had a bumper opening on Monday citing to fading concerns with respect to US debt ceiling over the previous weekend.

However, all headline indices did not capitalise on this head start. With lack of conviction at higher levels, the upside was not only

restricted; but also went on to witness a gradual decline in the latter half of the week. On Friday, once again favourable global cues

led to a promising start but no follow up buying this time either. Eventually, the Nifty ended the lacklustre week marginally in the

green and importantly a tad above the psychological mark of 18500.

The way our markets took a leap at the opening on Monday, we expected markets to challenge 18700 and beyond levels. So, it was

certainly disappointing behaviour of major indices as the week progressed. Nevertheless, technically speaking, the upside gap area

has been filled and the Nifty has retested the breakout points twice during the week. In addition, due to Friday’s price action, the

‘Inside Bar’ candle is clearly visible on daily time frame chart. Going ahead, if global markets support, we can construe this week’s

price development as a pull back and from here on, we may see Nifty resuming its upwards trajectory in the forthcoming week. This

view remains valid as long as cluster of supports around 18460 – 18400 – 18330 is not violated on a closing basis in the next couple

of sessions. On the flipside, the sturdy wall is visible around 18600 – 18670 and the moment its surpassed, we may see all time high

getting challenged soon. This seems possible considering the buoyancy in the broader market. The Mid and Small cap baskets

remained active throughout the week, indicating improved sentiments in the market. Hence, we advise traders not to get carried

away by such small declines. Broadly, we are in a strong uptrend and it’s advisable to focus on the larger picture.

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Technical and Derivatives Review |June 05, 2023

Sho

Form

ion

PCR-OI plunged below 1

Nifty spot closed at 18534.10 this week, against a close of 18499.35 last week. The Put-Call Ratio has increased from 1.37 to 0.95 on

Weekly basis. The annualized Cost of Carry is positive at 7.43%. The Open Interest of Nifty Futures decreased by 2.09%.

Derivatives View

Nifty current month’s future closed with a premium of 101.85 against a premium of 73.95 points to its spot in the previous week.

Next month’s future is trading at a premium of 184.65 points.

We started a week on a cheerful note but could clearly sense absence of follow-up buying interest. For the initial two session, index

kept hovering in a very narrow range which was followed by profit taking on in the mid-week to test 18500 mark. Eventually, we

concluded the week tad above 18500 due to minor recovery on the final day. In derivatives front, some unwinding of long positions

was seen Nifty; whereas, banking index added mixed bets. Put writers added a good amount of OI at 18500 strikes, indicating strong

nearby support. On the flip side, highest OI concentration is seen at 18600 CE, breaching same could bring back some momentum.

FIIs curtailed long bets; ‘Long Short Ratio’ plunged to 48% from 62% WoW. At this point in time, we believe that 18500-18450 is an

immediate support zone and until we respect it on the closing basis, traders’ should avoid any bearish bets in system.

Scrip

Futures

Chg (%)

Price

Chg(%)

CUB 34510000 136.13 124.45 (11.42)

COALINDIA 68674200 103.98 232.60 (4.12)

IGL 8529125 17.48 462.60 (4.43)

RELIANCE 37023750 17.05 2473.95 (2.00)

GMRINFRA 144495000 14.92 41.50 (8.49)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

TORNTPHARM 1980500 59.33 1783.25 4.91

INDUSTOWER 59066400 56.76 161.15 2.22

POLYCAB 1814100 55.57 3561.70 4.25

APOLLOHOSP 2192250 27.06 4992.05 7.47

MANAPPURAM 61470000 26.48 112.90 1.76

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Technical and Derivatives Review |June 05, 2023

Sameet Chavan Head Research – Technical & Derivatives sameet.chavan@angelone.in

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelone.in

Osho Krishan Senior Analyst – Technical & Derivatives osho.krishan@angelone.in

Research Team Tel: 022 - 39357600 Website: www.angelone.in

For Technical Queries E-mail: technicalresearch-cso@angelone.in

For Derivative Queries E-mail: derivatives.desk@angelone.in

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Technical and Derivatives Review |June 05, 2023

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