Technical Picks |
June 6, 2015
Nifty trading at crucial levels - trade with a cautious approach
Sensex (26768) / Nifty (8115)
Trading for the week began on a subdued note on Monday,
Exhibit 1: Nifty Weekly chart
despite the market posting decent gains on the previous Friday.
After a flat closing in Monday's session, the Nifty remained under
tremendous selling pressure during remaining days of the week.
However, we witnessed a modest of recovery in the index from
lower levels of 8050 - 8070 in Thursday's session. As a result,
Nifty managed to close above 8100 mark. Barring nominal
gains from the Capital goods pack, all other sectors closed
well inside the negative territory amongst which the Banking,
Consumer Durables, FMCG, Healthcare, Realty and Auto were
Source: Falcon
the major losers. The Nifty ended the week with a massive cut
Exhibit 2: Nifty Daily chart
of 3.78% over the previous week's closing.
Pattern formation:
„ The '89-day EMA' and the '89-week EMA' are placed at
27839 / 8415 and 25385 / 7636 levels, respectively.
„ The '20-day EMA' and the '20-week EMA' are placed at
27440 / 8291 and 27813 / 8413 levels, respectively.
Future outlook
Last week was clearly dominated by the bears as all trading
Source: Falcon
sessions ended well inside the negative territory. As stated in
up move from current levels cannot be ruled out. However, it's
our previous reports, 8450 - 8500 acted as a crucial resistance
advisable not to trade against the larger degree trend, which is
for Nifty as the index started falling in-line with our view after
negative. Thus, in case of a bounce, traders can use
making a high of 8467.15 on Monday. On daily time frame,
8220 - 8280 levels to create fresh short positions in the market.
we are seeing a trend line support around 8000 - 7990 levels.
On the lower side, 7990 would now be seen as an immediate
Whereas, the weekly chart is giving more conviction on the sell
support for the index. A sustainable move below this level may
side as 'Lower Top Lower Bottom' formation is still intact, this
result in an immediate correction towards 7800 - 7700 levels.
should be given more weightage. After a sharp fall of more
than 400 points from the recent high of 8467.15; a breather
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June 6, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
25,686
26,227
27,093
27,635
28,501
NIFTY
7,802
7,959
8,213
8,369
8,623
BANKNIFTY
16,588
17,068
17,950
18,431
19,313
ACC
1,374
1,421
1,476
1,523
1,578
AMBUJACEM
209
219
230
240
251
ASIANPAINT
723
742
768
786
813
AXISBANK
511
534
561
584
612
BAJAJ-AUTO
2,093
2,155
2,253
2,316
2,414
BANKBARODA
154
158
162
166
170
BHEL
232
240
249
257
266
BPCL
815
841
859
884
902
BHARTIARTL
401
409
417
424
432
BOSCH LIMITED
20,175
21,179
22,520
23,524
24,865
CAIRN
174
180
189
195
204
CIPLA
588
609
641
662
694
COALINDIA
365
377
393
405
422
DRREDDY
3,291
3,357
3,464
3,530
3,637
GAIL
352
363
380
392
409
GRASIM
3,220
3,335
3,507
3,622
3,794
HCLTECH
882
911
955
984
1,028
HDFCBANK
961
988
1,022
1,049
1,083
HDFC
1,155
1,186
1,220
1,251
1,285
HEROMOTOCO
2,395
2,471
2,605
2,681
2,814
HINDALCO
113
117
123
128
134
HINDUNILVR
773
798
841
866
910
ICICIBANK
265
277
296
308
327
IDEA
163
169
174
180
185
INDUSINDBK
799
823
854
878
909
INFY
1,973
2,001
2,032
2,060
2,091
ITC
275
288
308
321
341
KOTAKBANK
1,296
1,331
1,370
1,405
1,444
LT
1,600
1,631
1,674
1,706
1,749
LUPIN
1,670
1,710
1,768
1,808
1,866
M&M
1,125
1,160
1,215
1,250
1,305
MARUTI
3,654
3,713
3,806
3,865
3,958
NMDC
107
112
121
126
135
NTPC
133
135
138
140
143
ONGC
277
289
310
322
342
POWERGRID
138
141
144
147
150
PNB
135
140
148
153
161
RELIANCE
862
888
903
928
944
SBIN
236
247
264
275
293
SUNPHARMA
757
794
856
893
955
TCS
2,539
2,572
2,597
2,630
2,655
TATAMOTORS
408
430
456
478
504
TATAPOWER
64
67
72
75
80
TATASTEEL
284
296
314
327
345
TECHM
533
545
552
565
572
ULTRACEMCO
2,648
2,758
2,891
3,001
3,134
VEDANTA
167
176
189
197
210
WIPRO
531
542
555
566
579
YESBANK
768
798
848
877
927
ZEEL
307
316
327
336
347
Technical Research Team
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Derivatives Review |
Volatility may rise further
Nifty spot closed at 8114.70 this week against a close of 8433.65 last week. The Put-Call Ratio has decreased from 0.95 to 0.90
levels and the annualized Cost of Carry is negative at 0.08%. The Open Interest of Nifty Futures increased by 4.97%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.95 to 0.90 levels mainly due to
Implied Volatility (IV) for NIFTY has increased from 15.54%.to
open interest addition in call options. Huge buildup was visible
17.56%. Historical volatility (HV) of NIFTY is at 21.47% and
in 8200-8500 call options last week which are long formation
that for BANKNIFTY is trading at 30.04%. Liquid counters having
in the hopes market to give some bounce. On the other hand
very high HV are UNITECH, JPASSOCIAT, ADANIENT, RPOWER
in put options 7700-8000 strike prices added good buildup
and ADANIPOWER. Stocks where HV are on lower side are
followed by unwinding in 8200-8300 put options. Maximum
TECHM, HINDZINC, PETRONET, HEXAWARE and TCS.
buildup in current series is seen in 8500 call & 8000 put options.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a discount of 0.45 points
`1,74,875/- cr. to `2,03,436/- cr. Stock futures open interest
against the premium of 25.00 points to its spot. Next month
has decreased from `62,378/- cr. to `59,644/- cr. Liquid
future is trading with premium of 35.50 points. Liquid counters
counters names which added significant positions last week
where CoC is high are HCLTECH, HINDALCO, BAJAJ-AUTO,
are ICICIBANK, SUNPHARMA, TATAMOTORS, SBIN and
TATAMOTORS and MARUTI. Stocks with negative CoC are
AMBUJACEM. On the other hand unwinding was visible in
BANKBARODA, PNB, INFY, GAIL and INDUSINDBK.
counters like ZEEL, NTPC, HEROMOTOCO, CIPLA and
DRREDDY.
Derivative Strategy
Scrip : SBIN
CMP : `258.45
Lot Size : 1250
Exercise Date (F & O) :
25th. June 2015
View: Mildly Bullish
Strategy: Ratio Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
1250
SBIN
260
JUNE
CE
7.00
255
(`3.00)
SELL
2500
SBIN
280
JUNE
CE
2.00
265
`2.00
LBEP
-
`263/-
UBEP - `297/-
275
`12.00
285
`12.00
Max. Risk: Unlimited
Max. Profit: `21,250/-
If SBIN continues to move above UBEP.
If SBIN closes at 280 level on expiry.
295
`2.00
NOTE: Profit can be booked before expiry if SBIN moves in favorable direction and time value decays.
305
(`8.00)
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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)