Technical Picks | August 6, 2016
Undertone still bullish, but we advise to stay light
Sensex (28078) / Nifty (8683)
Exhibit 1: Nifty Weekly chart
The Nifty started the proceedings for the week on a quiet
note owing to muted global cues on Monday. However, it
gathered momentum as the session progressed and it first
surpassed the 8700 mark. But it was only to surrender off
the attained level as it then nosedived post the midsession to
breach the 8600 mark, although by a small margin. A
modest recovery then followed and the index managed to
reclaim the 8600 mark on a closing basis. This was followed
by three consecutive weak sessions which dragged the Nifty
to a low of 8518.15. Finally on Friday, the bulls came back
with a vengeance and pulled off a sharp upside rally of
1.54% on the Nifty, leading the index to conclude the week
with a gain of 0.52% over its previous week’s close.
Source: Company, Angel Research
Key Moving Averages:
Exhibit 2: Nifty Daily chart
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
26702
/
8184 and
25933 / 7884 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
27773
/
8544 and
26657 / 8173 levels, respectively.
Future outlook
The weekly change in the Nifty does not actually depict the
volatility that the index was subject to during the week. It was
an eventful week on the domestic front as the Rajya Sabha
eventually passed the much awaited GST Constitutional
Amendment Bill on Wednesday. However, as expected, it
Source: Company, Angel Research
turned out be a non-event as the market did not give any
reaction of exhilaration. This is because the market had
In the forthcoming week, the Nifty would gain momentum
already started factoring in the development in course of
after surpassing 8711.30 convincingly; whereas, on the
trading during the last couple of months.
flipside, 8590 - 8518 would now be seen as important
support levels.
The concluded week saw the Nifty witness a minor corrective
move after breaching the ‘Rising Wedge’ pattern. The index
Going forward, in case of the Nifty reaching our near term
then rebounded sharply after nearing the strong support
targets of 8780 - 8830 (the ‘Super Trend’ indicator on
zone of 8500 - 8480 levels. From a technical analysis
Monthly chart is placed at 8830), then we would advise
perspective, we now expect the index to slip into a
traders to start lightening up their longs as we may then see
consolidation mode and this would make it difficult to find
some pause in the bullish momentum. Traders are further
clear trades. From a larger degree view, the trend remains
advised to shift their focus on individual stocks following a
bullish and we reiterate at the likelihood of the Nifty
proper exit strategy.
reaching the next resistance zone of 8780 - 8830 quite
soon.
For Private Circulation Only
1
Technical Picks | August 6, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,340
27,709
27,997
28,366
28,654
NIFTY
8,444
8,564
8,638
8,757
8,831
NIFTY BANK
18,181
18,554
18,816
19,188
19,451
ACC
1,634
1,677
1,701
1,745
1,768
ADANIPORTS
216
225
231
240
245
AMBUJACEM
254
265
271
282
288
ASIANPAINT
1,098
1,121
1,138
1,160
1,177
AUROPHARMA
706
738
772
804
839
AXISBANK
531
549
559
577
587
BAJAJ-AUTO
2,640
2,751
2,816
2,927
2,992
BANKBARODA
141
149
154
163
168
BHEL
123
130
140
147
156
BPCL
537
562
583
607
628
BHARTIARTL
344
354
363
373
381
INFRATEL
373
381
395
403
417
BOSCH
23,944
24,489
24,870
25,415
25,796
CIPLA
508
521
528
540
548
COALINDIA
316
323
327
334
338
DRREDDY
2,900
2,954
2,985
3,039
3,070
EICHERMOT
20,178
21,201
22,027
23,050
23,876
GAIL
364
373
380
389
396
GRASIM
4,730
4,998
5,180
5,447
5,629
HCLTECH
705
763
811
869
917
HDFCBANK
1,214
1,232
1,245
1,263
1,277
HDFC
1,267
1,304
1,351
1,389
1,435
HEROMOTOCO
3,098
3,271
3,369
3,542
3,639
HINDALCO
130
137
141
147
151
HINDUNILVR
893
909
925
941
957
ICICIBANK
223
235
248
259
273
IDEA
100
103
105
108
110
INDUSINDBK
1,130
1,157
1,185
1,212
1,239
INFY
1,044
1,056
1,072
1,084
1,100
ITC
242
247
255
260
267
KOTAKBANK
738
756
766
784
794
LT
1,394
1,453
1,520
1,579
1,645
LUPIN
1,582
1,628
1,688
1,734
1,794
M&M
1,407
1,445
1,470
1,508
1,532
MARUTI
4,651
4,796
4,918
5,063
5,184
NTPC
154
158
160
164
167
ONGC
214
220
223
229
233
POWERGRID
170
173
177
181
185
RELIANCE
970
993
1,007
1,030
1,044
SBIN
219
226
230
237
241
SUNPHARMA
806
824
839
857
873
TCS
2,576
2,612
2,669
2,705
2,762
TATAMTRDVR
303
317
326
340
349
TATAMOTORS
460
488
504
532
547
TATAPOWER
69
70
72
73
74
TATASTEEL
344
363
373
392
402
TECHM
460
478
494
511
527
ULTRACEMCO
3,556
3,681
3,762
3,888
3,968
WIPRO
535
541
551
558
568
YESBANK
1,182
1,220
1,242
1,280
1,301
ZEEL
471
484
497
509
522
Technical Research Team
For Private Circulation Only
2
Derivatives Review | August 6, 2016
FIIs continue to buy in Index Futures, hold longs
Nifty spot closed at 8683.15 this week, against a close of 8638.50 last week. The Put-Call Ratio has increased from 0.94 to 0.97
levels and the annualized Cost of Carry is positive at 5.26%. The Open Interest of Nifty Futures increased by 11.76%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.94 to 0.97 levels. In call
Implied Volatility (IV) for NIFTY has decreased from
options,
8700-9000 strikes were active and they also
13.75% to 12.78%. Historical volatility (HV) of NIFTY is at
added good amount of positions. While, in put options we
13.97% and that for BANKNIFTY is at 18.91%. Liquid
witnessed decent amount of build-up in 8300-8600 strikes.
counters having very high HV are BHARATFORG,
Maximum build-up in August series is placed at 9000 call
APOLLOTYRE, VOLTAS, GRASIM and DHFL. Stocks where
and 8500 put options.
HV are on lower side are JPASSOCIAT, PNB, IDEA,
TATAPOWER and BIOCON.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 12.78
`2,06,385/- cr. to `2,46,461/- cr. Stock futures open
points against a premium of 53.00 points to its spot. Next
interest has increased from `68,427/- cr. to `75,103/- cr.
month future is trading with premium of 72.85 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are TATAPOWER,
week are ICICIBANK, HCLTECH, LT, HINDALCO and
HDFCBANK, TATAMTRDVR, HINDALCO and MARUTI.
EICHERMOT. On the other hand unwinding was visible in
Stocks with negative CoC are LT, BHARTIARTL, HCLTECH,
counters like DRREDDY, INFRATEL, SUNPHARMA, BAJAJ-
INFRATEL and IDEA.
AUTO and SBIN.
Derivative Strategy
Scrip: SBIN
CMP : 233.60
Lot Size : 3000
Exercise Date (F & O) :
25th Aug 2016
View: Mildly Bullish
Strategy: Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
3000
SBIN
235
AUG
CE
7.50
220
(`3.50)
SELL
3000
SBIN
245
AUG
CE
4.00
228
(`3.50)
BEP - ` 238.50/-
236
(`2.50)
Max. Risk: `10,500/-
Max. Profit: `19,500/-
If SBIN continues to move below BEP
If SBIN closes on or above 245 levels on expiry
244
`5.50
252
`6.50
Profit can be booked before expiry if SBIN moves in favourable direction and time value decays.
260
`6.50
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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