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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

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.

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Technical and Derivatives Review | December 07, 2019

For Private Circulation Only

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

Weekly change in OI

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Technical and Derivatives Review | December 07, 2019

For Private Circulation Only

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

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