September 5, 2015
Technical Picks |
Do not rush to catch the bottom
Sensex (25202) / Nifty (7655)
In the week gone by, the Nifty started the proceedings with a
Exhibit 1: Nifty Weekly chart
negative bias, owing to negative global cues. Except for
Thursday's session, the index fell throughout the week, which
resulted in it posting the highest weekly loss in the last four
years. The bears were completely in control as the market
breadth nosedived with number of declining counters
outnumbering the advancing ones by a huge margin. All the
sectoral indices ended the week with losses, with the BankNifty
being the worst performer followed by the Infra, Auto and the
Energy sector representative indices. The Nifty ended yet another
Source: Falcon
week with a sharp cut; it corrected by 4.77% over the previous
Exhibit 2: Nifty Daily chart
week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27465 / 8301 and 25922 / 7807 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
26691 / 8053 and 27517 / 8317 levels, respectively.
Future outlook
The Nifty continued to be in the corrective mode and ended the
Source: Falcon
week with a loss of more than 4%. In the concluded week, the
retracement level of the entire 'Impulsive' upmove from
index posted the highest weekly loss in the last four years. As
5119 to 9119) and 7470 (100% price extension of the down
indicated in our previous weekly report, the pessimism resumed
move from 9119 to 7940). The Nifty may give pullback moves
as trading began for the week on Monday; the Nifty faced
from the above mentioned support zone; however, the upmove,
resistance around the 50% retracement level of the previous
if any, will just be a pullback rally as we have witnessed in the
corrective move. On Tuesday, the Nifty witnessed a gap down
recent past. On any pullback moves, the Nifty is likely to face a
opening owing to negative global cues; the downward
strong resistance around 7850 and 7940. The volatility factor
momentum accelerated thereon, which resulted in a further
continues to rule the markets and thus, traders are advised to
correction. Although we saw marginal recovery in Thursday's
stay with the broader trend and use any pullback move as an
session, it was again sold into on Friday, in line with the 'Sell on
opportunity to create short positions near the resistance areas
Rise' view which we have been suggesting in our daily reports.
rather than looking for any bottom fishing.
If we observe medium term charts, the immediate support levels
for the Nifty are seen around 7590 (which is the 38.2%
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September 5, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,223
24,712
25,609
26,098
26,994
NIFTY
7,358
7,507
7,775
7,923
8,192
BANKNIFTY
15,052
15,590
16,472
17,011
17,892
ACC
1,272
1,309
1,354
1,390
1,436
AMBUJACEM
193
202
212
221
231
ASIANPAINT
752
782
823
853
893
AXISBANK
427
448
483
503
538
BAJAJ-AUTO
2,127
2,169
2,226
2,268
2,325
BANKBARODA
151
163
176
188
201
BHEL
186
196
214
225
243
BPCL
786
818
853
885
920
BHARTIARTL
326
338
352
364
378
BOSCH LIMITED
20,160
20,990
22,410
23,240
24,660
CAIRN
133
140
147
153
160
CIPLA
616
633
661
677
705
COALINDIA
321
334
351
364
381
DRREDDY
3,838
3,945
4,133
4,240
4,427
GAIL
261
271
286
296
310
GRASIM
3,239
3,307
3,391
3,459
3,543
HCLTECH
895
918
949
972
1,003
HDFCBANK
950
973
1,003
1,026
1,056
HDFC
1,051
1,097
1,155
1,200
1,259
HEROMOTOCO
2,174
2,233
2,324
2,382
2,473
HINDALCO
68
71
77
80
86
HINDUNILVR
783
807
838
862
893
ICICIBANK
236
247
266
277
295
IDEA
140
145
151
155
161
INDUSINDBK
783
812
838
867
894
INFY
1,024
1,049
1,092
1,117
1,160
ITC
306
311
320
326
334
KOTAKBANK
556
581
620
645
684
LT
1,462
1,498
1,556
1,592
1,649
LUPIN
1,777
1,818
1,882
1,923
1,986
M&M
998
1,055
1,148
1,204
1,298
MARUTI
3,879
3,971
4,102
4,194
4,325
NMDC
92
95
100
103
108
NTPC
108
111
116
120
125
ONGC
205
215
232
242
259
POWERGRID
114
119
127
132
140
PNB
110
120
134
144
158
RELIANCE
797
816
845
864
892
SBIN
206
216
234
243
261
SUNPHARMA
811
835
876
899
940
TCS
2,476
2,511
2,566
2,602
2,656
TATAMOTORS
296
310
329
342
362
TATAPOWER
52
54
58
60
64
TATASTEEL
198
209
221
231
243
TECHM
483
506
529
553
576
ULTRACEMCO
2,661
2,788
2,905
3,032
3,149
VEDANTA
88
90
95
98
103
WIPRO
531
542
559
570
587
YESBANK
600
623
659
683
718
ZEEL
340
350
370
380
399
Technical Research Team
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Derivatives Review |
Volatility may not reduce anytime soon
Nifty spot closed at 7655.05 this week against a close of 8001.95 last week. The Put-Call Ratio has decreased from 0.99 to 0.96
levels and the annualized Cost of Carry is positive at 2.22%. The Open Interest of Nifty Futures increased by 8.77%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.99 to 0.96 levels mainly due to
Implied Volatility (IV) for NIFTY has increased from 22.02% to
build-up in call options. Huge buildup was visible in
26.11%. Historical volatility (HV) of NIFTY is at 32.14% and
7700-8500 call options last week and we believe it's a blend of
that for BANKNIFTY is trading at 42.14%. Liquid counters having
both long and shorts. On the other hand in put options good
very high HV are POWERGRID, ACC, AMTEKAUTO,
amount of OI addition was seen in 7000-7500 strikes.
KOTAKBANK and ULTRACEMCO. Stocks where HV are on lower
Maximum buildup in current series is seen in 8500 call & 7500
side are BATAINDIA, PAGEIND, GMRINFRA, L&TFH and
put options.
PETRONET.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 9.30 points
`1,86,410/- cr. to `2,17,471/- cr. Stock futures open interest
against a premium of 20.75 points to its spot. Next month
has decreased from `56,522/- cr. to `54,671/- cr. Liquid
future is trading with premium of 50.50 points. Liquid counters
counters names which added significant positions last week
where CoC is high are ZEEL, VEDL, AXISBANK, TATASTEEL and
are ZEEL, SBIN, HINDALCO, PNB and POWERGRID. On the
DRREDDY. Stocks with negative CoC are NMDC, POWERGRID,
other hand unwinding was visible in counters like HDFCBANK,
PNB, HINDALCO and INDUSINDBK
ULTRACEMCO, AMBUJACEM, LUPIN and WIPRO.
Derivative Strategy
Scrip : RELIANCE
CMP : `837.95
Lot Size : 250
Exercise Date (F & O) :
24th. Sept 2015
View: Volatile within range
Strategy: Short Strangle
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
SELL
250
RELIANCE
820
SEPT
PE
20.00
765
(`20.00)
SELL
250
RELIANCE
860
SEPT
CE
15.00
795
`10.00
LBEP
-
`785/-
UBEP - `895/-
825
`35.00
Max. Risk: Unlimited
Max. Profit: `8,750/-
855
`35.00
If RELIANCE continues to move below LBEP or above UBEP. If RELIANCE closes between two strike
885
`10.00
prices on expiry.
NOTE: Profit can be booked before expiry if RELIANCE moves in favorable direction and time value decays.
915
(`20.00)
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Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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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)