Technical and Derivatives Review | July 06, 2018
Index remains sideways, keep focusing on stocks
Sensex (35658 ) / Nifty (10773)
Source: Trading View
Future outlook
In last couple of weeks, Fridays have been the real saviour for our markets. Last Friday, we managed to recover from some mid-week
hiccups and yesterday, there was a decent attempt made to surpass the 10800 mark. Overall, the activity throughout this week
panned out well for our markets as we managed to march gradually towards the higher end of the range. However, having said that,
the market is yet to confirm a clear direction as the consolidation continues within recent boundaries.
In the week gone by, all eyes were on how Nifty behaves around 10740 and due to decent up move on Friday; the Nifty has
managed to surpass this hurdle convincingly. But, there is one major level yet to be conquered i.e. 10840. The way some of the
sectors behaved, it was really an encouraging sign for our market. But, 10840 being the crucial resistance in the near term, its better
not to pre-empt any move. We would rather be comfortable becoming a follower and waiting for the decisive move outside the
range. On the upside, 10820 - 10840 are the levels to watch out for and on the flipside, 10725 followed by 10677 are likely to act
important support levels. Yes, recently there has been a whipsaw in the downward direction; but now we believe that any decisive
breakout in either direction is now likely to trigger some momentum as well as a trended move.
Meanwhile, one should continue with a conventional approach of following stock centric moves. During the week, ‘Cement’
counters did well as per the anticipation and apart from this, marquee ‘Paint’ stocks showed tremendous outperformance towards
the fag end. Hence, one can look to focus on these themes along with selective ‘Midcap’ stocks which are gearing up for a decent
relief rally after the recent hammering.
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Technical and Derivatives Review | July 06, 2018
10700-10850 is an immediate trading range
Nifty spot closed at 10772.65 this week, against a close of 10714.30 week. The Put-Call Ratio has increased from 1.48 to 1.51 and the
annualized Cost of Carry is positive at 0.97%. The Open Interest of Nifty Futures increased by 10.65%.
Derivatives View
Nifty current month future closed with a premium of 5.75 points against a discount of 19.50 points to its spot. Next month future is
trading with a premium of 24.70 points.
As far as Nifty options activities for the week are concerned, 10800 and 10900 call options added some fresh positions. On the other
side, we witnessed 10400-10700 put options adding fresh positions; wherein, 10700 added huge positions and we believe this is
writing that took place. For July series, the maximum open interest concentration stands at 10800 followed by 11000 call options;
while, for put options is placed at 10600 followed by 10700 strike.
Last week, we saw index correcting towards 10600 mark; however, strong buying index got attracted to surpass the hurdle of 10700-10750
levels. On Friday, Nifty rallied above 10800 levels but failed to sustain, resulting index concluding the first week on July series with gains of
0.78%. In index futures segment, some fresh long formation was seen in Nifty as well as BankNifty. FIIs too added long positions in index
and stock futures. At the same time, we saw good amount of writing in 10700 put options. Whereas, highest OI in 10800 call options hints,
immediate resistance around 10800-10850 levels. Considering the above data points, it seems 10700-10850 is a trading range going ahead;
thus, traders are advised being light in index and preferring stock specific approach.
Long Formation
Short Formation
Chg (%)
Chg (%)
Chg (%)
Chg (%
Weekly change in OI
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Technical and Derivatives Review | July 06, 2018
Technical and Derivatives Team:
Sameet Chavan
Chief Analyst - Technical & Derivatives
[email protected]
Ruchit Jain
Technical Analyst
[email protected]
Rajesh Bhosale
Technical Analyst
[email protected]
Sneha Seth
Derivatives Analyst
[email protected]
Research Team Tel: 022 - 39357600
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For Derivatives Queries
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