Technical and Derivatives Review | October 05, 2018
Nifty below 200-day SMA, does not augur well
Sensex (34377 ) / Nifty (10316)
Source: Trading View
Future outlook
The carnage continues and the distressed market is in no mood to spare the market participants caught on the wrong foot. But,
historically it’s proven, this is how market functions as it always tries to choke traders/investors up with the velocity of which it
moves. During the week, last three days have been a complete nosedive for benchmark, which consolidated in a range last week. In
the course of the action, the index went on to breach all major supports one after another to eventually register the biggest weekly
loss after February 12, 2016.
Technically speaking, so many market participants were keeping a close eye (with a ray of hope) on how index behaves around the
daily ‘200 SMA’ placed in the zone of 10800 - 10770. But, generally, no support works in a falling market like this and hence, there
was no respect at all for this key long-term moving average. We are significantly below this now and are standing around the 78.6%
Fibonacci retracement of the entire up move from 9951.90 to 11760.20. This coincides with the weekly ’89 EMA’, but it would be
very difficult to comment whether market would find some support or not. Yes, there could be in between bounce backs; but how
sustainable they would be that time will only tell. In our sense, traders should ideally stay light on positions and should avoid taking
undue risks. It’s advisable not to pre-empt anything and let market give further indication. For momentum traders, it would be a
difficult time going ahead as the volatility has increased tremendously; but having said that for investors, such dips can provide
better opportunities to add quality propositions to their portfolio only in a staggered manner.
As far as levels are concerned, for the coming week, 10261 followed by 10111 would be seen immediate supports; whereas on the
flipside, 10481 - 10675 are likely to act as strong hurdles.
For Private Circulation Only
1
Technical and Derivatives Review | October 05, 2018
Nifty OI surged 25% in last week’s fall
Nifty spot closed at 10316.45 this week, against a close of 10930.45 last week. The Put-Call Ratio has decreased from 1.33 to 1.07
and the annualized Cost of Carry is positive at 5.43%. The Open Interest of Nifty Futures increased by 24.69%.
Derivatives View
Nifty current month future closed with a premium of 30.70 points against a premium of 23.85 points to its spot. Next month future
is trading with a premium of 87.70 points.
As far as Nifty options activities for the week are concerned, the overall build-up remained quite scattered between 10500-11200
call and 9800-10700 put options. Maximum open interest for October series now stood at 11000 followed by 11200 call and 10500
followed by 10700 put options.
The benchmark index corrected another 5.54% last week to conclude the session below important support zone of 10400-10500.
The fall in September series was mainly due to long unwinding and now we are observing huge short formation. The Nifty futures open
interest surged 25% last week. Stronger hands rolled shorts in October series and they have been adding fresh shorts in the recent fall,
resulting their index futures ‘Long Short Ratio’ declining from 46% to 36%. Thus, traders are advised staying light in index and those who
are trapped with longs look to exit on any bounce back.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
MINDTREE
4250400
14.78
1043.00
0.66
KSCL
1228500
62.50
501.80
(13.79)
HINDALCO
38118500
7.30
241.45
5.02
BPCL
12421800
59.67
265.30
(29.30)
IBULHSGFIN
15694000
2.58
913.80
5.77
HINDPETRO
30165975
29.80
164.90
(34.67)
OFSS
330300
1.52
4026.90
2.44
M&M
16742000
24.52
770.70
(10.75)
JISLJALEQS
38349000
0.71
63.15
2.60
EICHERMOT
305925
23.99
21248.50
(12.51)
Weekly change in OI
For Private Circulation Only
2
Technical and Derivatives Review | October 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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