Technical and Derivatives Review | September 07, 2019
Despite early hiccups, markets defended key levels
Sensex (36982) / Nifty (10946)
Source: Trading View
Future outlook
After an extended weekend, index opened with a big gap down on Tuesday mainly on the back of escalated trade war between US and
China over the weekend. This development was fuelled by our weak GDP numbers and hence, after some consolidation, the selling
momentum accelerated at the stroke of the penultimate hour which lasted till the closing point of the day. Eventually Nifty ended with a
mammoth cut over 200 points. On the following day, the selling resumed but fortunately things cooled off at a global front, which resulted
into a gradual recovery throughout the remaining part of the week.
Now in terms of levels, we are almost unmoved on a weekly basis but the development that happened during the week was encouraging
and adds further conviction to our previous week’s optimistic stance. In the previous article, we had highlighted few notable observations
which are hinting towards some hope of relief in the September month. Addition to that, this week we can see a possibility of base shifting
higher to 10746 from 10637. The weekly charts of Nifty and Bank Nifty exhibits copy book ‘Bullish Dragonfly Doji’ patterns and the Nifty
Midcap 50 depicts a ‘Bullish Hammer’ around the cluster of supports. We also did some time analysis for midcap index and as per the
historical evidences; the September month is 21st (Fibonacci number) from January 2018 which may possibly turn out to be a reversal
point. And now if we try to apply the same theory on Nifty weekly chart, the forthcoming week would be the 21st week in the 8th zone of
‘Fibonacci Time Retracement’. Yes, it sounds extremely optimistic but we remain hopeful and expect the index to initially head towards
11100 - 11180. In fact, we will not be surprised to see this sturdy wall getting demolished quite soon to extend the relief move towards
11350 - 11475. On the lower side, immediate supports are placed at 10867 - 10816 but the validity of above mentioned pointers remains
intact as long as key support of 10746 - 10637 remains defended successfully.
All the above mentioned hypothesis as of now is based on various assumptions but we hope for it to turn into a reality which will bring back
wider smile on faces of traders/ investors across the country who are desperate for some revival.
For Private Circulation Only
1
Technical and Derivatives Review | September 07, 2019
10800 a near term support level
Nifty spot closed at 10946.20 this week, against a close of 11023.25 last week. The Put-Call Ratio has decreased from 1.38 to 1.31.
The annualized Cost of Carry is positive at 4.58%. The Open Interest of Nifty Futures has decreased by 0.31%.
Derivatives View
Nifty current month future closed with a premium of 27.45 points against a premium of 13.35 points to its spot. Next month future
is trading with a premium of 67 points.
As far as Nifty options activities for the week are concerned, we saw some build-up in 11000 call option. On the other side, 10800
put added decent amount of positions. Maximum open interest for the monthly series now stands at 11500 followed by 11000 call
and 10800 put option.
During the week, the Nifty traded in a narrow range and ended below the 11000 mark. While not many fresh positions were added
in Nifty, the BankNifty witnessed addition of 12% of open interest. On the options front, 10800 put option of the monthly expiry has
highest open interest and hence, it is a crucial support in near term. The immediate resistance for the index is seen around the
11000 mark and if we manage to cross above the same, then the index could re-test 11100-11150. Considering the above mentioned
range, traders are advised to initiate long positions in the zone of 10900-10800 and look to book profits when the index approaches
the higher end of the range i.e. 11100-11150.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
BPCL
14072400
24.99
380.55
7.38
UBL
1234100
49.79
1306.65
(5.11)
APOLLOTYRE
10431000
20.77
173.95
3.45
CANBK
14016000
40.95
192.65
(12.47)
IDBI
22152000
15.88
27.70
5.12
IBULHSGFIN
23188000
15.91
390.35
(9.97)
RECLTD
28512000
12.87
151.05
5.08
LICHSGFIN
11757900
13.28
400.75
(6.03)
HEROMOTOCO
2685000
9.22
2673.30
3.80
DLF
38124800
12.00
155.10
(7.93)
Weekly change in OI
For Private Circulation Only
2
Technical and Derivatives Review | September 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]
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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