Technical and Derivatives Review | March 09, 2018
Sub-10000 not too far now
Sensex (33307 ) / Nifty (10227)
Source: Trading View
Future outlook
The week turned out to be a decider as we saw Nifty finally coming out of the recent congestion zone. In fact, we had clearly stated
in our previous article that we would see this suspense getting unfolded in the first half. In-line with expectation, the index made
things clear on Tuesday after violating the 10300 mark. Some respite in last couple of sessions led to a weekly close well below this
key point.
This was clearly an action packed week for our traders as we once again saw some trended move after a consolidation of nearly
three weeks. This was clearly on cards; but as we all know, timing such moves is not as easy as it looks in the hindsight. Thus, for a
positional trader, it is always a prudent strategy to remain with the trend when it is in the early stages. The near term trend turned
lower after confirming the ‘Bearish Engulfing’ pattern at the end of the ‘Budget week’. Addition to this, the ‘RSI-Smoothened’
slipped below the 70 mark and now we can see prices closing below the ’20-EMA’ on weekly time frame for the first time after
January 2017. Hence, we would continue with our ‘sell on rise’ approach and would expect the index to first slide towards 10033 and
then eventually to enter sub-10000 levels quite soon. However, before this, 10140 - 10350 has become a no trade zone for the
market. If any negativity has to resume, it would only happen after violating the 10140 mark. The ideal scenario to initiate short
position would be either below this crucial junction or after seeing a decent relief rally towards the higher end i.e. 10350 - 10400. As
of now, we do not expect the Nifty to surpass these hurdles in coming days.
Since, it is slightly difficult envisaging the time target; traders ideally shouldn’t be too concern about the time; rather keep focusing
on mentioned key levels. One should remain light and avoid taking undue risks in such kind of uncertainty. In case of some relief rally
within the consolidation range, traders should focus on individual stocks and it would be wise to make timely exits as well.
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Technical and Derivatives Review | March 09, 2018
Stronger hands still holding shorts in index futures
Nifty spot closed at 10226.85this week, against a close of 10458.35 last week. The Put-Call Ratio has decreased from 1.29 to 1.14
and the annualized Cost of Carry is negative at 1.95%. The Open Interest of Nifty Futures increased by 7.56%.
Derivatives View
Nifty current month future closed with a discount of 10.40 points against a discount of 1.80 points to its spot. Next month future is
trading with a premium of 18.90 points.
In Nifty options front, we saw good amount of open interest addition in 10200-10500 call options; followed by unwinding in 10700
and 10800 strikes. On the flip side, some build-up was seen in 10000-10200 put strikes. We also saw decent unwinding in
10300-10500 put options. Now, maximum concentration of open interest has shifted lower to 10500 call and 10000 put options.
The benchmark index corrected below 10150 mark but recouped some of its losses to conclude the week above 10200 mark. As far
as FIIs activities are concerned we saw mixed positions forming in system; however, majority of the positions formed were on the
short side. In stock futures, they continue their buying streak. At current juncture, we believe 10400-10500 shall act as a strong
resistance for index now; whereas, fresh selling pressure may bring index towards its important support zone placed around 10000
Long Formation
Short Formation
Chg (%)
Chg (%)
Chg (%)
Chg (%
Weekly change in OI
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Technical and Derivatives Review | March 09, 2018
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
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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