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.
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
Chg (%)
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
Chg (%)
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)
Technical and Derivatives Review | December 07, 2019
For Private Circulation Only
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
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For Derivatives Queries E-mail: derivatives.[email protected]angelbroking.com
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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