Technical and Derivatives Review | June 07, 2019
Index defends its support, but ends well below the 12000 mark
Sensex (39616) / Nifty (11871)
Source: Trading view
Future outlook
The week started on a positive note as the index tested the 12100 mark on the first trading session. Post a mid-week holiday; traders were
awaiting the outcome of the RBI’s monetary policy meet on Thursday. The RBI announced a rate cut of 25 bps in repo which was in line with
expectations of majority of markets participants. However, inspite of that the broader markets led by the banking space witnessed a sharp
sell-off and Nifty ended the week below the 11900 mark.
Post the election results outcome, the Nifty has crossed the 12000 mark couple of times but has been unable to sustain above the same.
During the week, the index once again witnessed correction to drag the index well below the 12000 mark. On the lower time frame chart,
the index has breached below the support of a ‘Rising Wedge’ pattern and such scenarios usually lead to a short term corrective phase. In
Friday’s session, the index tested its’20 DEMA’support of 11770 and recovered from the lows. Thus, 11770 would be the crucial support to
watch for in the coming week and if the same is breached, then the index should continue to correct towards 11700-11615. On the flipside,
the index is likely to face resistance around 11940-11980 on pullback moves. Overall, we expect the index to consolidate within the above
mentioned boundaries in near term. Having said that, one should keep in mind that the higher degree trend continues to be positive and
this is just a corrective phase within an uptrend. Hence, positional traders should look to accumulate stocks when the index approaches the
mentioned support range.
Amongst the sectoral indices, the PSU Banks and the Pharma index were the biggest losers during the week. Traders are advised to take a
stock specific approach for the coming week and trade with a proper exit strategy.
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Technical and Derivatives Review | June 07, 2019
Nifty tanks post RBI rate cut, but no major shorts
Nifty spot closed at 11870.65 this week, against a close of 11922.80 last week. The Put-Call Ratio has decreased from 1.43 to 1.32.
The annualized Cost of Carry is positive at 4.63%. The Open Interest of Nifty Futures has increased by 3.91.
Derivatives View
Nifty current month future closed with a premium of 30.10 points against a discount of 6.30 points to its spot. Next month future is
trading with a premium of 65.35 points.
As far as Nifty options activities for the week are concerned, build-up was scattered between 12000-12500 calls. On the other side,
11500 and 11800 puts added decent positions. Maximum open interest for coming weekly series now stands at 12000 call and
11800 put options.
During last series, we saw the move beyond the psychological figure of 12000. The benchmark index clocked a fresh record high of
12103.05 but index couldn’t sustain at higher levels and hence corrected below 11800 mark. On Friday, due to some recovery in the
final hour we concluded the session tad above 11850. In F&O space, although we saw some profit booking from the record highs,
the outstanding positions for both the indices added hardly any relevant positions. We also witnessed decent amount of writing in
ATM puts; which has resulted base shifting higher to 11800. Considering the above F&O activity, we don’t see any sign of caution
now. Going ahead, the previous support of 12000-12040 may now act as a hurdle; whereas, 11750-11800 shall act as immediate
support zone for the benchmark index.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
APOLLOHOSP
1285000
34.98
1395.40
13.17
RELCAPITAL
14923500
36.01
91.95
(23.91)
PFC
31539400
10.30
134.60
7.90
GAIL
16287369
67.04
315.45
(12.75)
VOLTAS
4816000
4.06
619.25
6.50
BANKBARODA
67236500
30.40
121.45
(8.82)
HAVELLS
5401000
12.54
789.90
6.09
ORIENTBANK
9688000
18.19
91.70
(8.16)
VGUARD
2397000
3.50
244.55
3.51
INDIACEM
18702000
8.48
98.20
(7.10)
Weekly change in OI
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Technical and Derivatives Review | June 07, 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
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For Derivatives Queries
E-mail: [email protected]
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Technical and Derivatives Review | June 07, 2019
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