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| 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.

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| 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

Scrip

Futures

Chg (%)

Price

Chg(%)

AMARAJABAT 1657000 36.04 906.20 (2.69)

ACC

2847000

35.35

1675.40

(1.61)

AMBUJACEM

17787000

21.97

253.70

(3.26)

M&MFIN

19510308

12.13

168.40

(2.01)

GMRINFRA

58792500

9.88

26.15

(2.24)

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

CANBK 43291400 137.48 110.95 6.32

TATACHEM

6108000

73.52

488.

24.67

SAIL

76513000

35.13

55.15

13.13

NATIONALUM

48790000

32.26

42.55

9.66

MOTHERSUMI

26404000

31.06

159.35

7.81

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| December 05, 2020

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Technical and Derivatives Team:

Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com

Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jain@angelbroking.com

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com

Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com