For Private Circulation Only
Technical and Derivat
ives Review
| December 05, 2020
No stopping for mighty bulls, Nifty above 13200
Sensex (45080) / Nifty (13259)
Source: Trading View
Future outlook
Trading for the week started on a flat note on Tuesday as there was no major trigger on the global as well as domestic front. The
index then gradually resumed its upward trajectory to reclaim 13000 first and then clocked fresh record highs as the week
progressed. Index specific, there was no major movement but overall bias remained positive as we managed to add another couple
of percent to the previous weekly close.
There has been no stopping for this recent marathon rally and it’s been more than one and half month now, markets are giving
gravity defying moves. In the week gone by, if we look at the benchmark, we may not get the real picture of the overall action; but if
we take a glance at some of the individual themes like Auto, individual stocks have given spectacular moves throughout the week.
Now technically speaking, we have been hovering in the overbought territory since the last 2-3 weeks; but sometimes the market
does not respect the theory and hence, it can remain overbought for a long time as well. But in our sense, the optimism has now
turned into a bit of euphoria and when such a condition happens, it’s advisable to be a proactive bit and take some money off of the
table, especially for a momentum trader. Undoubtedly, the broader degree trend remains strongly bullish and in case of any
meaningful decline, one should stick to the ‘buy on decline’ strategy. As far as levels are concerned, 13300 13500 would be seen as
immediate resistance zone; whereas on the lower side, 13150 – 13100 are the levels to watch out for.
If we meticulously observe the intraday charts, we can see a formation of ‘Rising Wedge’ pattern on hourly chart and hence, a move
below 13100 would lead to further profit booking towards 12980 12900. Hence, traders are advised to take a note of all these key
levels and act accordingly.
For Private Circulation Only
Technical and Derivat
ives Review
| December 05, 2020
Stronger hands preferred unwinding longs in index futures
Nifty spot closed at 13258.55 this week, against a close of 12968.95 last week. The Put-Call Ratio has increased from 1.28 to 1.57.
The annualized Cost of Carry is positive at 5.41%. The Open Interest of Nifty Futures has increased by 7.21%.
Derivatives View
Nifty current month future closed with a premium of 53.05 points against a premium of 48.45 points to its spot. Next month future
is trading at a premium of 87.10 points.
As far as Nifty options activities are concerned, we hardly saw any relevant open interest addition in call options. However, on the
put side 12800-13200 strikes added decent build-up. Maximum open interest for the monthly series is placed at 13500 call and
13000 put options.
Post strong upmove in November series, we witnessed follow-up buying in the first week of December series. The benchmark index
rallied another 2.26% along with addition of fresh longs. We did see some profit booking in banking index initially but Friday’s smart
buying led weekly closing 1.77% higher. We also saw good amount of long position in BankNifty. Stronger hands continued buying in
equities but they have been unwinding their long in index futures segment. As a result, their Long Short Ratio plunged from 82% to
77%. Now, 13000-13100 is an immediate support zone for Nifty and on the higher side 13400-13500 shall act as a hurdle.
Considering the above data, until we manage to sustain above 13000 mark traders’ are advised trading with a positive bias.
Weekly change in OI
Short Formation
Chg (%)
AMARAJABAT 1657000 36.04 906.20 (2.69)
Long Formation
Chg (%)
CANBK 43291400 137.48 110.95 6.32
For Private Circulation Only
Technical and Derivat
ives Review
| December 05, 2020
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]ng.com
Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jai[email protected].com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]ng.com
Sneha Seth Derivatives Analyst [email protected]gelbroking.com