1
Technical and Derivatives Review | December 07, 2019
For Private Circulation Only
Profit booking triggers post RBI monetary policy
Sensex (40445) / Nifty (11921)
Source: Trading View
Future outlook
Market has seen stupendous run over the past couple of months without any major correction. During last week, we finally saw
some respite to this ongoing optimism. First half can be considered as a part of consolidation wherein some encouraging signs seen
on Wednesday as the hopes were built for yet another rate cut by RBI. However, on Thursday, the traders’ fraternity looked
disappointed after RBI maintaining its ‘status quo’ on its repo rate. This resulted into a decent decline on the following day as well to
register weakest week in last two months.
Clearly, last week’s tail end correction was a bit unexpected to us. But since the outcome from the policy was not on expected lines,
such reaction was evident. The index is now standing at a crucial juncture and the trend for the forthcoming week would be decided
by the price action in first couple of days. For the Nifty, the sacrosanct support is placed in the zone of 11883 11850. In case of
Nifty sliding below it, we may see extension of the profit booking towards 11750 11700. So by no means, this is a trend reversal;
rather we would construe this as a healthy correction before resuming the uptrend. On the other side, if Nifty manages to hold the
support zone and starts staying beyond 12000, it would negate the possibility of extended correction and then the index can
continue its upward trajectory towards 12100 – 12160.
Traders are advised not to get carried away by such in between hiccups, rather use such declines to add quality propositions in the
portfolio. Since the selling was seen across the board, there is nothing much to comment on sectoral front. Despite this, we
continue to like the ‘Pharma’ and ‘Metal’ spaces, which we believe are likely to provide potential trades.
2
Technical and Derivatives Review | December 07, 2019
For Private Circulation Only
Expect surge in volatility
Nifty spot closed at 11921.50 this week, against a close of 12099.35 last week. The Put-Call Ratio has decreased from 1.54 to 1.25.
The annualized Cost of Carry is positive at 5.24%. The Open Interest of Nifty Futures has decreased by 1.29%.
Derivatives View
Nifty current month future closed with a premium of 34.20 points against a premium of 43.80 points to its spot. Next month future
is trading with a premium of 78.10 points.
As far as Nifty options activities for the week are concerned, the build-up was scattered between 12000-12400 call and 11300-12000
put options. Maximum open interest for the monthly series now stands at 12000 for both call and put option.
During the week, we saw index opening on a strong note but unfortunately couldn’t sustain at higher levels. As the week progressed,
we witnessed some consolidation and on Wednesday Nifty made an attempt to recover but post monetary policy announcement
once again fresh selling got attracted. On Friday, we saw sharp sell-off in the broader market to finally conclude the week tad below
the support zone of 11950. Despite such selling, we haven’t seen any major short formation in index future segment. Interestingly,
the highest open interest concentration is now placed in 12000 strike of both call and put options. Historically, it has been our
observation that such concentration in the same strike has attracted a big swing in either direction. Hence, we would advise traders
to wait for fresh build-up in the coming week before initiating any fresh directional positions in index.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
EQUITAS 23680300 124.69 112.90 6.31
TATAELXSI 1104600 21.60 853.70 5.23
BIOCON 10807300 18.38 288.60 2.29
KOTAKBANK 8760400 15.81 1673.00 3.50
UJJIVAN 7527700 15.55 353.75 4.17
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
BHEL 54774400 34.71 46.80 (12.52)
IGL 6795250 31.30 401.95 (3.16)
RBLBANK 17691300 21.54 336.55 (9.24)
LT 19173375 20.75 1292.30 (3.33)
BANKBARODA 77689800 17.98 97.40 (7.46)
3
Technical and Derivatives Review | December 07, 2019
For Private Circulation Only
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearc[email protected]ngelbroking.com
For Derivatives Queries E-mail: derivatives.[email protected]angelbroking.com
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and
Portfolio Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking
Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration
number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for
accessing /dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed
public offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits
and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Technical
and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com
Ruchit Jain Technical Analyst [email protected]lbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhos[email protected]m
Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com