Technical and Derivatives Review | February 08, 2019
Broader market destruction continues, 10850 becomes key support
Sensex (36546) / Nifty (10944)
Source: Trading View
Future outlook
Last week, one day ahead of the Union Budget, the recovery mode started in our market. After giving a good move of nearly 500
points in five days, the rally halted on the day of RBI Monetary policy. It was quite surprising to see massive sell off on the following
day, despite RBI Governor granting 25bps cut in Repo rate and changing the stance to neutral. The selling aggravated in the last hour
of the week to shave off decent portion of intra-week gains.
First half of the week gone by has been fantastic for benchmarks. In the process, Nifty managed to surpass its multi-month hurdle of
11000. In this move, the broader market continued to underperform; but on Thursday, index consolidated and there was some early
sign of revival seen in so many individual pockets. This ecstasy did not last long as we saw yet another bout of immense selling
across the board on Friday to conclude the week with lot of ambiguity. Going ahead, if market has to see a robust move, it would be
very important for other pockets to participate as well. As far as levels are concerned, we are still in the relatively safe zone. Going
ahead, 10900 - 10850 would be seen as a key support zone. Till the time Nifty remains above it, there is no reason to worry for. On
the flipside, 11041 followed by 11118 are the levels to watch out for.
At this juncture, a prudent strategy would be to stay light and follow a stock specific approach. One could switch on to the
aggressive mode only after Nifty surpassing the 11000 mark along with the broader market participation. In this scenario, a move
towards 11300 - 11400 cannot be ruled out. Only a sustainable move below 10850 would give a dent to above mentioned optimistic
scenarios.
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Technical and Derivatives Review | February 08, 2019
FIIs adding longs in February series
Nifty spot closed at 10943.60 this week, against a close of 10893.65 last week. The Put-Call Ratio has decreased from 1.65 to 1.59.
The annualized Cost of Carry is positive at 2.28%. The Open Interest of Nifty Futures has increased by 16.61%.
Derivatives View
Nifty current month future closed with a premium of 13.65 points against a premium of 20.40 points to its spot. Next month future
is trading with a premium of 44.75 points.
As far as Nifty options activities for the week are concerned, being start of new series the overall build-up is scattered between
11100-11500 call options. On the flip side, 10600, 10900 and 11000 put options added good amount of positions. Maximum open
interest for February series now stands at 11000 call and 10400 put options.
Post Friday’s sharp recovery, we saw follow-up move to surpass the important hurdle of 11000 mark. The rally extended above
11100 but due to some profit booking on Friday’s session we concluded the week with the gains of merely 0.40%. During the week,
we saw decent long formation and these positions are still intact. At present, the earlier resistance of 10900-10950 shall now act as a
support for index. Thus, traders are advised to use this declined to add-on fresh longs.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
SRF
985500
38.71
2223.45
12.79
RPOWER
95648000
116.52
10.90
(58.79)
MANAPPURAM
10740000
40.06
104.60
11.63
TATAMOTORS
61608000
5.44
150.90
(17.43)
INFRATEL
8534000
10.63
325.75
9.39
ADANIENT
43184000
5.47
124.55
(12.78)
TECHM
16342800
32.40
809.45
7.83
TATACHEM
2628750
9.63
593.20
(11.72)
PCJEWELLER
11134500
37.59
76.00
6.29
JETAIRWAYS
7484400
15.79
217.50
(10.64)
Weekly change in OI
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Technical and Derivatives Review | February 08, 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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E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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