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Technical and Derivatives Review | March 07, 2020

Global uncertainty continues, we are back to crucial level of 11000

Sensex (37577) / Nifty (10989)

Source: Trading View

Future outlook

Two weeks back we were comfortably above 12000 and within no time, benchmark index corrected nearly 10% and we are standing tad

below the 11000 mark. Things became gloomy once the coronavirus started spreading outside china rapidly and uncertainty with respect to

this spooked market participants across the globe. Throughout this week, we had some respite after last Friday’s meltdown; but once again

yet another Friday turned out to be a nightmare as we grappled with global as well as domestic worries. On Thursday night, RBI suspended

‘Yes Bank’ board and put it under the moratorium for 30 days; this triggered panic sort of situation in market participants and as a result,

we started the day with a massive plunge at the opening. Fortunately for us, things did not worsen from there; in fact, a modest recovery

trimmed some portion of losses.

Now, let us see how charts are shaped up and what would be the possible path of action for our markets in the forthcoming week. Global

markets are surrounded with uncertainty related to Coronavirus and hence, we need to see how things pan out over the weekend with

respect to this. Largely, the immediate direction would be dictated by this development. Technically speaking, we can see bears getting

exhausted a bit after Friday’s massive knock at the opening. We are seeing 11000 as a key support and we are almost close to it. If things

cool off a bit over the weekend, we may see some bounce back towards 11250 - 11400. However, surpassing 11400 is still a daunting task

for the market. On the flipside, 10900 followed by 10800 can be seen as immediate supports. Momentum traders are advised to stay light

and should ideally avoid taking undue risks. However, for investors, such panic situation is an opportunity to grab some marquee names for

their portfolios.

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Technical and Derivatives Review | March 07, 2020

FII’s continue their selling streak

Nifty spot closed at 10989.45 this week, against a close of 11201.75 last week. The Put-Call Ratio has increased from 1.10 to 1.25.

The annualized Cost of Carry is negative at 8.23%. The Open Interest of Nifty Futures has increased by 18.04%.

Derivatives View

Nifty current month future closed with a discount of 49.55 points against a discount of 52.6 points to its spot. Next month future is

trading with a discount of 4.40 points.

As far as Nifty options activities for the week are concerned, we saw fresh build-up in 11000-11300 call options. On the flip side,

open interest addition was seen in 11000-10500 puts. Maximum open interest for the monthly series now stands at 11000 put and

12000 call options.

During the week, the indices consolidated in a range till Thursday. However, the indices opened with a huge gap down opening on

Friday and it corrected to end the week below the 11000 mark. Nifty futures have added open interest of about 18% week-on-week

indicating formation of short positions. FII’s continued their selling streak as they sold equities worth Rs. 10720 crores in the cash

segment during the week. They have added short positions on the index futures segment as well and hence their ‘Long Short’ ratio is

still quite low around 14.6%. India VIX spiked further and has ended above the 25 mark. On the options front, for the coming weekly

expiry open interest on the call side is scattered from 11200 to 11500, whereas 11000-10800 put options have witnessed some open

interest addition. The above data still continues to depict a cautious picture and hence, we continue with our advice for traders to

stay light on positions. Traders are advised to keep a tab on the VIX and the FII index futures activity as a fall in the volatility along

with short covering move by the stronger hands will be the leading signs of any pullback move. The immediate supports as per the

data are around 10800 followed 10500.

Long Formation

Scrip

Futures

Chg (%)

Price

Chg (%)

NAUKRI 382000 152.98 2656.35 2.24

BANDHANBNK 4465200 65.67 405.25 5.53

DIVISLAB 2238800 19.01 2239.10 6.20

MINDTREE 1194400 18.12 973.90 6.97

PIDILITIND 2107500 16.63 1652.45 9.39

Weekly change in OI

Short Formation

Scrip

Futures

Chg (%)

Price

Chg (%)

PVR 1513200 87.65 1625.20 (12.10)

MFSL 3502200 37.38 522.15 (9.10)

INDIGO 3402000 25.28 1175.95 (8.41)

RBLBANK 20767500 23.51 254.60 (11.27)

ICICIPRULI 9817500 21.93 415.55 (11.18)

For Private Circulation Only

Technical and Derivatives Review | March 07, 2020

Research Team Tel: 022 - 39357600 Website: www.angelbroking.com

For Technical Queries E-mail: technicalresearch-cso@angelbroking.com

For Derivatives Queries E-mail: derivatives.desk@angelbroking.com

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Technical and

Derivatives Team:

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

Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com

Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com