Technical and Derivatives Weekly Review - July 8, 2023

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Technical and Derivatives Review |July 08, 2023

Global cues act as a speed bump; Nifty ends the week with modest gains

Sensex (65280) / Nifty (19332)

Source: Tradingview.com

Future outlook

During the major part of the week, our market experienced a positive trend following a bullish breakout from the previous week. On

Monday, the Nifty benchmark Index opened significantly higher, setting the tone for the week as prices continued to climb and

reached new milestones each day. However, on Friday, global market weakness led to the end of an eight-day winning streak,

causing Nifty to erase around a percent gain from the top and finish the week with a modest gain of 0.74%, a tad above 19300.

After the long-awaited breakout last week, the bullish momentum remained strong at the beginning of the week, defying obstacles,

and decoupling from global counterparts. However, profit-taking at higher levels on Friday and succumbing to global pressures

resulted in a decline in prices, wiping out a significant portion of the weekly gains. The weekly chart shows a small bullish candle

with a slightly larger upper shadow, indicating tentativeness at higher levels following the recent surge. Despite this, we believe the

bull run is likely to continue, marking the start of a major upward movement. However, the momentum on the upside may not

match the intensity of the past couple of weeks. Considering the overbought conditions, we may witness a period of consolidation in

the coming week, during which dips could be seen as buying opportunities. On the other hand, it is advisable to secure profits at

higher levels and avoid complacency until the indicators exit the overbought territory. In terms of support levels, the immediate

support lies around 19200, where a bullish gap was left this week, while the major breakout levels around 19000-18900 serve as a

strong foundation for our market. As the prices are currently in uncharted territory, it is challenging to identify resistance zones.

However, the range of 19500-19600 appears to be an immediate hurdle for the anticipated consolidation.

Throughout the week, several themes exhibited significant strength, and it is crucial to focus on identifying such sectors that can

potentially deliver remarkable movements in a range-bound market. Additionally, keeping an eye on global cues is important to

monitor any positive developments after the recent weakness or if they exert downward pressure on our market in line with their

own vulnerabilities.

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Technical and Derivatives Review |July 08, 2023

Sho

Form

ion

FIIs remain buoyant; Long Short Ratio at 70%

Nifty spot closed at 19331.80 this week, against a close of 19189.05 last week. The Put-Call Ratio has decreased from 1.58 to 0.89 on

Weekly basis. The annualized Cost of Carry is positive at 6.30%. The Open Interest of Nifty Futures increased by 8.38%.

Derivatives View

Nifty current month’s future closed with a premium of 66.70 against a premium of 72.20 points to its spot in the previous week.

Next month’s future is trading at a premium of 160.50 points.

The July month started on a spectacular note as the benchmark index clocked new highs and settled the week a tad above the 19300

zone, procuring 0.74 percent. On the derivatives front, we witnessed an addition of fresh longs on a weekly basis in key indices,

signifying the inherent strength in the uprun. The stronger hands continued their buying streak in the cash and future segments

throughout the week, advancing the ‘Long Short Ratio’ to 70% from 69% WoW. On the options front, scattered piling up of OI is seen

from 19400-19200 put strikes, indicating a series of support zone for the upcoming week. On the higher end, a significant piling of OI

is seen at 19400-19500 call strikes, indicating a stiff hurdle for Nifty. Considering the data, we expect any cool-off in the index

towards the support zone should augur well for the bulls, and thus, one needs to keep a pragmatic approach post the recent rally.

Scrip

Futures

Chg (%)

Price

Chg(%)

EICHERMOT 6221425 81.32 3204.60 (11.05)

SRF 4980750 31.08 2230.55 (3.28)

UPL 25771200 30.04 663.20 (3.63)

DEEPAKNTR 2559000 18.79 2058.15 (4.84)

BANDHANBNK 48987500 16.07 231.15 (5.03)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

HINDPETRO 32078700 41.47 307.70 11.61

IOC 94038750 37.33 99.85 8.53

COLPAL 3379600 28.54 1773.40 4.23

GRANULES 13278000 25.41 313.45 4.76

PNB 324208000 20.80 60.80 16.81

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Technical and Derivatives Review |July 08, 2023

Sameet Chavan Head Research – Technical & Derivatives sameet.chavan@angelone.in

Sneha Seth Senior Analyst – Technical & Derivatives sneha.seth@angelone.in

Rajesh Bhosale Analyst – Technical rajesh.bhosle@angelone.in

Osho Krishan Senior Analyst – Technical & Derivatives osho.krishan@angelone.in

Hitesh Rathi Analyst – Technical & Derivatives hitesh.rathi@angelone.in

Research Team Tel: 022 - 39357600 Website: www.angelone.in

For Technical Queries E-mail: technicalresearch-cso@angelone.in

For Derivative Queries E-mail: derivatives.desk@angelone.in

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Technical and Derivatives Review |July 08, 2023

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