December 5, 2015
Technical Picks |
7700 - A key support
Sensex (25638) / Nifty (7782)
Trading for the week began on a quiet note on Monday, citing
Exhibit 1: Nifty Weekly chart
subdued global cues. The overall intra-day range was thin and
eventually the Nifty ended the session with negligible losses.
On Tuesday, the market opened mildly in the positive, on the
back of a cheerful mood across globe markets. Subsequently,
the Nifty traded within a narrow range and finally ended the
session with nominal gains. Wednesday's session opened slightly
higher, stimulated by the overnight rally on the US bourses.
However, this early morning lead was short lived as the Nifty
pared off the gains in the initial hour of trade itself, and then
Source: Falcon
remained under a bit of a pressure throughout the remaining
Exhibit 2: Nifty Daily chart
part of the day. Trading on the last two days of the week was
clearly dominated by the bears and as a result, the Nifty
concluded the week a tad below the 7800 mark. The index
ended the week with a cut of 2.02% over the previous week's
closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' for the
Sensex/Nifty are placed at
26565/8053 and
26005 / 7849 levels, respectively.
Source: Falcon
The '20-day EMA' and the '20-week EMA' for the Sensex/
speaking, considering last week's price movement, we were
Nifty are placed at 26041 / 7912 and 26572 / 8055 levels,
not expecting the Nifty to sneak below the 7875 mark.
respectively.
Unfortunately it happened; but still, we are of the opinion that
so long as the Nifty holds the 7700 mark, the bulls have little to
Future outlook
worry about. In case of a less probable breakdown below this
The concluded week was an eventful one for our market. On
level, the 'Inverted Pattern' confirmed in the previous week would
the domestic front, the RBI kept its interest rates unchanged, in
get negated and in this scenario, an immediate correction
line with the street's expectation. On the global front, European
towards 7600 cannot be ruled out. Our analysis suggests a
markets plunged after the ECB president Mr Mario Draghi failed
range of 7970 to 7700 for the Nifty in the near term. Traders
to deliver the widely expected major stimulus packages. As a
are advised to stay light on positions as the market is lacking a
result, the US Dollar strengthened vis-vis most other global
clear direction. We recommend trading with a proper exit
currencies including the Indian Rupee (INR). These developments
strategy and avoiding undue risks.
cumulatively influenced our domestic equity market. Honestly
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December 5, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
25,207
25,422
25,839
26,055
26,472
NIFTY
7,642
7,712
7,846
7,916
8,049
NIFTY BANK
16,474
16,686
17,092
17,304
17,710
ACC
1,306
1,320
1,347
1,361
1,388
ADANIPORTS
245
250
260
265
275
AMBUJACEM
189
192
198
201
207
ASIANPAINT
806
820
844
858
882
AXISBANK
445
453
464
471
482
BAJAJ-AUTO
2,383
2,428
2,471
2,516
2,560
BANKBARODA
155
161
172
178
189
BHEL
159
164
171
176
183
BPCL
868
887
917
936
966
BHARTIARTL
300
311
327
338
355
BOSCH
17,846
18,111
18,585
18,850
19,323
CAIRN
129
134
138
143
147
CIPLA
626
636
649
658
671
COALINDIA
320
328
337
345
354
DRREDDY
3,025
3,110
3,188
3,273
3,350
GAIL
340
348
359
367
378
GRASIM
3,657
3,688
3,737
3,768
3,817
HCLTECH
796
816
851
871
906
HDFC
1,033
1,046
1,069
1,082
1,106
HDFCBANK
1,128
1,150
1,191
1,213
1,255
HEROMOTOCO
2,521
2,569
2,652
2,700
2,783
HINDALCO
74
77
79
82
84
HINDUNILVR
786
800
819
833
851
ICICIBANK
250
256
267
272
283
IDEA
132
135
140
144
149
INDUSINDBK
911
927
938
954
965
INFY
1,004
1,027
1,062
1,085
1,121
ITC
325
331
340
345
355
KOTAKBANK
638
651
674
688
711
LT
1,308
1,324
1,354
1,370
1,400
LUPIN
1,726
1,766
1,822
1,862
1,918
M&M
1,267
1,291
1,336
1,360
1,406
MARUTI
4,390
4,495
4,597
4,703
4,805
NTPC
127
129
132
134
137
ONGC
218
223
231
235
243
POWERGRID
126
128
133
136
141
PNB
125
130
138
143
151
RELIANCE
944
955
972
983
1,000
SBIN
229
235
244
250
259
SUNPHARMA
698
727
750
779
803
TCS
2,277
2,303
2,347
2,373
2,417
TATAMOTORS
379
389
409
420
440
TATAPOWER
61
63
65
67
69
TATASTEEL
221
231
238
248
255
TECHM
522
529
537
545
553
ULTRACEMCO
2,727
2,797
2,846
2,917
2,966
VEDL
86
89
92
95
99
WIPRO
548
559
573
584
598
YESBANK
717
728
750
762
784
ZEEL
378
387
403
412
428
Technical Research Team
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Derivatives Review |
No big moves expected though IV's may rise
Nifty spot closed at 7781.90 this week against a close of 7942.70 last week. The Put-Call Ratio has decreased from 0.91 to 0.79
levels and the annualized Cost of Carry is positive at 6.71%. The Open Interest of Nifty Futures increased by 5.26%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.91 to 0.79 levels mainly due to
Implied Volatility (IV) for NIFTY has decreased from 14.64% to
open interest addition in call options. In call options, 8000 to
14.57%. Historical volatility (HV) of NIFTY is at 15.26% and
8200 strikes added good amount of OI. While in put options,
that for BANKNIFTY is trading at 21.12%. Liquid counters having
7600 and 7700 strikes added some buildup. Maximum buildup
very high HV are TV18BRDCST, GMRINFRA, JSWSTEEL, L&TFH
in current series is seen in 8200 call & 7500 put options.
and TATACHEM. Stocks where HV are on lower side are
ADANIPOWER, JPASSOCIAT, NCC, IDEA and GAIL.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 38.60 points
`1,77,748/- cr. to `2,08,293/- cr. Stock futures open interest
against a premium of 29.50 points to its spot. Next month
has increased from `59,844/- cr. to `63,989/- cr. Liquid
future is trading with premium of 74.35 points. Liquid counters
counters names which added significant positions last week
where CoC is high are BANKBARODA, VEDL, HDFC,
are MARUTI, AMBUJACEM, POWERGRID, DLF and
JINDALSTEL and SUNPHARMA. Stocks with negative CoC are
SUNPHARMA. On the other hand unwinding was visible in
NMDC, SBIN, GAIL, GRASIM and ACC.
counters like DRREDDY, M&M, KOTAKBANK, ULTRACEMCO
and CIPLA.
Derivative Strategy
Scrip : BANKNIFTY
CMP : 16984.80
Lot Size : 30
Exercise Date (F & O) :
31st Dec 2015
View: Mildly Bearish
Strategy: Ratio Bear Put Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(Rs)
Profit/Loss
BUY
30
BANKNIFTY
17000
DEC
PE
350.00
15850
(`150.00)
BUY
60
BANKNIFTY
16500
DEC
PE
175.00
16150
`150.00
BEP
-
16000
16450
`450.00
Max. Risk: Unlimited
Max. Profit: `15,000/-
16750
`250.00
If BANKNIFTY continues to move below BEP on expiry. If BANKNIFTY closes at 16500 levels on expiry.
17050
0.00
NOTE: Profit can be booked before expiry if BANKNIFTY moves in favorable direction and time value decays.
17350
0.00
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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)