1
For Private Circulation Only
Technical
and Derivatives Review
| May 08, 2020
Market slips into a consolidation mode, 9100 defended successfully
Sensex (31643) / Nifty (9252)
Source: Trading View
Future outlook
Last week, we had some encouraging moves in the market and in the process, the Nifty took a leap beyond the 9800 mark. However, with
US President Donald Trump threatening China on hiking tariffs over the weekend, spooked market participants across the globe. As a result,
we had a huge gap down opening on Monday, which was mostly followed by a consolidation throughout the remaining part of the week.
Eventually, the Nifty ended the week tad above 9200 by shedding over 6% as compared to the previous weekly close.
Although, it appears to be a sharp cut when compared to previous week's close, the overall trading action during the week was muted. In
fact, the last couple of trading sessions' price action was extremely lethargic and the market completely looked directionless. Neither Bulls
had the strength to overcome the sturdy wall of 9400-9450 nor Bears were dominant enough to violate the 9100 mark. Hence, for the
coming week, 9450 to 9100 remains to be an immediate range. Only a sustainable breakout on either side would confirm the next path of
action. Traders holding existing longs should maintain their positions as long as 9100 is successfully defended.
At present, traders are advised to stay light and should ideally continue focusing on individual stocks. Although we are completely not out
of the woods when it comes to Coronavirus Pandemic, we remain hopeful till the time key support mentioned is not violated. Once we see
Nifty surpassing the higher boundary of 9450, we would see a good broad-based participation in the market.
2
For Private Circulation Only
Technical
and Derivatives Review
| May 08, 2020
Options data hits some consolidation
Nifty spot closed at 9251.50 this week, against a close of 9859.90 last week. The Put-Call Ratio has decreased from 1.89 to 1.32. The
annualized Cost of Carry is negative at 2.93%. The Open Interest of Nifty Futures has decreased by 9.81%.
Derivatives View
Nifty current month future closed with a discount of 14.85 points against a discount of 29.05 points to its spot. Next month future is
trading with a discount of 6.05 points.
As far as Nifty options activities for the week are concerned, we witnessed open interest addition in 9500 and 10000 call options. On
the flipside, 9300-9100 put options saw some open interest additions as well. Maximum open interest for the May monthly series
now stands at 10000 call option and 9000 put option.
The indices opened gap down at the start of the week. The indices then corrected for a couple of sessions and then consolidated in a
range. During the week, Nifty witnessed unwinding of open positions whereas Bank Nifty saw fresh short formation which led to its
under performance. FII’s who started the series with a ‘Long Short Ratio’ around 64 percent squared off some of their long positions
and formed fresh shorts. Their ‘Long Short Ratio’ in the index futures segment now stands at 51 percent. As per the options data,
9000-9500 is the immediate range for Nifty and we may see some consolidation within this range with stock specific momentum.
Hence, traders are advised to take a stock specific approach for the coming week.
Long Formation
Scrip
OI
Futures
Chg (%)
Price
Price
Chg (%)
NIITTECH
57862
5
48.79
1387.55
16.96
MARICO
12305800
9.90
300.65
4.63
AUROPHARMA
10562800
8.85
653.80
4.12
TORNTPHARM
943000
12.73
2437.95
3.59
BIOCON
13425100
5.80
358.45
1.09
Weekly change in OI
(3,000)
500
4,000
7,500
11,000
14,500
18,000
21,500
25,000
Call Put
Short Formation
Scrip
OI
Futures
Chg (%)
Price
Price
Chg (%)
HINDUNILVR 22957500 75.63 2065.65 (6.05)
ASHOKLEY
46973000
52.79
45.25
(13.56)
TORNTPOWER
2070000
44.05
302.40
(8.53)
JUSTDIAL
1887200
39.40
341.35
(15.70)
VOLTAS
3043000
35.73
454.20
(10.51)
3
For Private Circulation Only
Technical
and Derivatives Review
| May 08, 2020
Research Team Tel: 022 – 39357600(Extn.6844) Website: www.angelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]g.com
Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]com