Technical and Derivatives Review | July 06, 2019
Market reacts adversely post budget, poured water on all expectations
Sensex (39513) / Nifty (11811)
Source: Trading View
Future outlook
Over the weekend, we had some favourable developments with respect to US-China trade war and hence, the week started off on a
cheerful note. Post this, our markets had to deal with our domestic factors as we were inching closer to the Union Budget. All four sessions
ahead of the event traded in a narrow range but overall bias remained positive. On Friday, the Finance Minister presented the actual
Budget post which we witnessed a massive sell off in the market to pare down all weekly gains.
Since last many months, the benchmark index has been showing tremendous outperformance but the broader market continues to remain
in a slumber. Ahead of the Union budget, there were some hopes built in and people were expecting some triggers that will boost the
traders’ confidence back into the mid and small cap pockets. However the kind of reaction we saw on Friday, clearly suggested
disappointment and hence had an adverse reaction once the budget commentary concluded. With this, the water has been poured on all
expectations and market participants again have to wait for some other ray of hope. As far as levels are concerned, we closed precisely at
the key psychological level of 11800 after which next support zone lies around 11700-11630.
Honestly at this juncture, it’s hard to give any possible direction for the forthcoming week. We need to see how market reacts in the first
half. Till the time, 11630-11591 are not violated, the broader structure does not get distorted. But in case if it happens, then get ready for
some sharper cuts in the market. On the higher side, 11900-12000 remains to be a sturdy wall. On Friday, the banking space showed
resilience and didn’t participate at all in the correction, which is the only positive takeaway. If market has to regain strength, the banking
needs to take a charge. Also the IT and Midcaps witnessed complete sell off and hence, we need to see whether the correction is overdone
or yet to extend further. At present, traders are advised to stay light and it’s better to adopt a confirmatory approach for a while.
For Private Circulation Only
1
Technical and Derivatives Review | July 06, 2019
Base shifted lower to 11700
Nifty spot closed at 11811.15 this week, against a close of 11788.85 last week. The Put-Call Ratio has decreased from 1.29 to 1.09.
The annualized Cost of Carry is positive at 1.51%. The Open Interest of Nifty Futures has increased by 0.58.
Derivatives View
Nifty current month future closed with a premium of 9.80 points against a premium of 52.65 points to its spot. Next month future is
trading with a premium of 76.40 points.
As far as Nifty options activities for the week are concerned, we saw good amount of build-up in 12000-12200 and 12500 call
options. On the other side, 11700-11900 puts added decent positions Maximum open interest for the monthly series now stands at
12000 call and 11500 put option.
During the week, we saw index showcasing strength for four consecutive sessions to rally beyond. 11950. However, sharp sell-off
was witnessed post the Union Budget announcement. The benchmark index tanked 135 points to conclude the week near the
support zone of 11800-11850. But, surprisingly despite such sharp fall on Friday, we hardly saw any meaningful selling in index
futures segment. Maximum open interest in the weekly series, shifted lower to 11700 from 11800. Whereas, good amount of
writing was seen in 11900-12200 calls. At present, 11700-11750 shall act as a support zone; whereas, 11950-12000 to act as a strong
hurdle now. We would advise traders to wait and watch for the follow-up move in next 2-3 sessions before initiating any directional
trade.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
MFSL
2412000
26.10
418.05
1.76
SUNTV
6215000
16.85
482.50
(5.03)
MARICO
8192600
14.00
380.30
1.96
NBCC
32096000
16.83
57.70
(3.67)
KOTAKBANK
9330800
13.19
1518.95
2.11
ENGINERSIN
8510000
16.57
114.00
(6.67)
INDUSINDBK
11630000
12.32
1526.65
8.20
VOLTAS
4372000
16.03
614.80
(4.12)
IDBI
27456000
8.75
35.80
1.56
TORNTPHARM
642500
15.66
1515.55
(1.61)
Weekly change in OI
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2
Technical and Derivatives Review | July 06, 2019
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
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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