Technical and Derivatives Review | October 05, 2019
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Last ray of hope at 11100
Sensex (37673) / Nifty (11175)
Source: Trading View
Future outlook
Trading for the week began with a downside gap and it probably set the mood for the entire week. The mounting concerns over NBFCs
started spooking traders’ sentiments which was fuelled by massive sell off in US markets during the midweek. On Tuesday as well as Friday,
despite early morning lead, our markets succumbed to the selling pressure and eventually went on to slide below the 11200 mark. On a
weekly basis, index shed nearly 3 percent which was biggest weekly fall in last couple of months.
Exactly two weeks ago, everybody was so ecstatic, jubilant after FM’s announcement on slashing the corporate taxes. This triggered
colossal two-day rally in our market to take a giant leap. Who would have thought then, we will again have to undergo that similar pain that
we have been witnessing since last 12 – 15 months. The Nifty wiped off 50% gains in last eight trading sessions; whereas the Bank Nifty and
Midcap 50 indices have lost more than 70%, which is really annoying. There were some hopes built for better days for our markets and last
couple of weeks have poured complete water on it. Now for Nifty, we are placed at a crucial junction and probably a last ray of hope for
bulls. The current position of Nifty converges with multiple key evidences. Firstly as we highlighted the 50% retracement of the recent up
move which coincides with the ’20 SMA’ on daily chart and more importantly, the previous breakout zone of 11200 11100, which now
ideally should act as a sheet anchor support for the Nifty. Let see how market behaves around it in the forthcoming week and be hopeful to
have some positive development.
As far as levels are concerned, below 11100 we may see selling getting aggravated and on the flipside, a resumption of uptrend should only
happen if Nifty manages to sustain above 11400. Traders are advised to keep a tab of all the above mentioned levels and should ideally
avoid taking undue risks.
Technical and Derivatives Review | October 05, 2019
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Banking index open interest surged 73% in recent fall
Nifty spot closed at 11174.75 this week, against a close of 11512.40 last week. The Put-Call Ratio has decreased from 1.19 to 0.97.
The annualized Cost of Carry is positive at 4.89%. The Open Interest of Nifty Futures has increased by 7.44%.
Derivatives View
Nifty current month future closed with a premium of 40.35 points against a premium of 67.10 points to its spot. Next month future
is trading with a premium of 88.55 points.
As far as Nifty options activities for the week are concerned, build-up was scattered between 11400-12000 call options. On the other
side, 11000, 11200 and 11400 put added good amount of positions. Maximum open interest for the monthly series now stands at
11500 call and 11000 put option.
Last week, we witnessed decent selling pressure from 11500-11550 and as the week progressed, pull backs were being sold into
with formation of fresh shorts. We breached important supports of 11350-11400 and then 11200-11250 as well. In index futures
segment, we witnessed good amount of short addition; especially in banking index wherein open interest surged up nearly 73%
within a week. Considering the price action, we believe majority for the positions formed are on short side. At present, we have
concluded the week at very important support and hence, it is very important to see the development in coming week before
initiating any aggressive positions.
Long Formation
Chg (%)
Chg (%)
ESCORTS 5023700 7.76 602.10 1.18
IOC 52503500 5.82 151.55 4.23
SIEMENS 1224850 2.67 1531.65 1.55
M&M 22013000 1.59 567.30 1.62
TECHM 14758800 1.51 711.60 0.43
Short Formation
Chg (%)
Chg (%)
IDFCFIRSTB 235740000 35.05 36.70 (12.51)
PEL 6357402 26.38 1512.20 (12.27)
YESBANK 201238400 22.81 42.25 (13.69)
JUSTDIAL 2340800 21.69 612.65 (10.93)
INDUSINDBK 14754400 17.31 1268.20 (14.89)
Weekly change in OI
Technical and Derivatives Review | October 05, 2019
For Private Circulation Only
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