Technical Picks | April 9, 2016
Profit booking could likely extend
Sensex (24674) / Nifty (7555)
Trading for the week gone by started off with Monday’s
Exhibit 1: Nifty Weekly chart
session opening with an upside gap, although marginal. The
Nifty then remained sluggish throughout the session but the
index registered its closing (at 7758.80) at the highest point
in the last three months owing to the rally in the preceding
period. On Tuesday, post the RBI Monetary Policy meet
where the central bank cut the interest rate by 25bp, we saw
significant profit booking, leading the Nifty to close with a
cut of more than 2%. The Nifty traded within a narrow range
during the remaining part of the week, maintaining its
negative bias. Eventually, the Nifty concluded the week’s
proceedings a tad above the 7550 mark, shedding 2.05%
over its previous week’s close.
Pattern formation:
Source: Company, Angel Research
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
24933
/
7576 and
Exhibit 2: Nifty Daily chart
25576 / 7741 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
24877
/
7582 and
24994 / 7605 levels, respectively.
Future outlook
A colossal rally in the month of March was followed by some
decent profit booking in the inaugural week of the new
financial year. If one refers to our previous weekly report, we
had clearly expressed our negative bias on the market and
the week’s corrective move was no surprise to us. The Nifty
precisely lost steam after entering our mentioned resistance
zone of
7750
-
7780 and then kept on correcting
throughout the week post the RBI Monetary Policy. In the
process, the index sneaked below the reliable support level
Source: Company, Angel Research
of 7580, which coincided with the daily ’20 EMA’. This is a
Meanwhile, the corporate result season (1QFY2017) will
sign of weakness and thus, considering the negative
kick-off in the forthcoming week and thus, we may see a lot
placement of the daily ‘RSI-Smoothened’ oscillator, we
of stock specific moves, where traders can look for potential
expect this corrective move to continue towards
trades.
7480 - 7405 levels. On the flipside, 7580 - 7640 is likely to
act as a strong hurdle. Going forward, we expect the range
bound action to continue, but with a negative bias.
For Private Circulation Only
1
Technical Picks | April 9, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,087
24,380
24,902
25,196
25,718
NIFTY
7,378
7,466
7,615
7,704
7,853
NIFTY BANK
14,948
15,258
15,768
16,079
16,589
ACC
1,364
1,403
1,426
1,465
1,488
ADANIPORTS
193
206
228
241
263
AMBUJACEM
215
220
229
234
242
ASIANPAINT
824
838
863
877
902
AUROPHARMA
714
736
753
775
791
AXISBANK
400
411
431
442
463
BAJAJ-AUTO
2,279
2,334
2,406
2,461
2,533
BANKBARODA
134
138
146
151
159
BHEL
109
116
120
127
131
BPCL
865
882
896
914
927
BHARTIARTL
312
323
337
348
362
INFRATEL
353
361
375
383
396
BOSCH
17,923
18,458
19,385
19,920
20,847
CIPLA
485
495
507
517
529
COALINDIA
266
273
281
288
296
DRREDDY
2,914
2,976
3,033
3,096
3,152
EICHERMOT
18194
18687
19129
19623
20065
GAIL
328
338
345
355
362
GRASIM
3,763
3,873
3,933
4,042
4,102
HCLTECH
798
816
832
850
866
HDFCBANK
1,031
1,045
1,061
1,075
1,091
HDFC
1,031
1,055
1,090
1,114
1,149
HEROMOTOCO
2,806
2,861
2,937
2,992
3,068
HINDALCO
81
84
88
91
94
HINDUNILVR
823
837
859
873
896
ICICIBANK
205
213
227
235
249
IDEA
103
106
110
113
117
INDUSINDBK
912
925
947
960
982
INFY
1,106
1,136
1,192
1,222
1,278
ITC
310
316
324
330
338
KOTAKBANK
636
651
670
685
704
LT
1,134
1,163
1,207
1,236
1,279
LUPIN
1,390
1,465
1,510
1,585
1,630
M&M
1,160
1,196
1,223
1,259
1,285
MARUTI
3,201
3,316
3,534
3,649
3,867
NTPC
122
127
130
134
137
ONGC
201
204
207
209
212
POWERGRID
137
139
140
142
143
RELIANCE
1,005
1,021
1,038
1,053
1,070
SBIN
170
176
187
194
204
SUNPHARMA
787
799
811
823
835
TCS
2,387
2,410
2,449
2,472
2,511
TATAMTRDVR
258
268
279
288
299
TATAMOTORS
355
363
377
385
399
TATAPOWER
56
61
65
70
75
TATASTEEL
297
309
321
334
346
TECHM
426
441
458
472
489
ULTRACEMCO
3,023
3,091
3,160
3,228
3,298
WIPRO
531
540
556
565
580
YESBANK
805
827
849
871
892
ZEEL
376
382
389
396
403
Technical Research Team
For Private Circulation Only
2
Derivatives Review | April 9, 2016
FIIs light on positions, wait for further development
Nifty spot closed at 7555.20 this week, against a close of 7713.05 last week. The Put-Call Ratio has decreased from 0.84 to 0.76
levels and the annualized Cost of Carry is positive at 5.53%. The Open Interest of Nifty Futures decreased by 12.33%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.84 to 0.76 levels. In call
Implied Volatility (IV) for NIFTY has slightly decreased from
options, we saw significant build-up in 7600-8200 strikes,
15.62% to 13.86%. Historical volatility (HV) of NIFTY is at
while IV’s plunged week on week indicating writing in these
20.36% and that for BANKNIFTY is at 28.54%. Liquid
call options. While in put options,
7300-7400 strikes
counters having very high HV are CENTURYTEX, BIOCON,
remained active and added decent build-up. Maximum
L&TFH, EXIDEIND and TATAPOWER. Stocks where HV are
build-up in current series is seen in 8000 call and 7500 put
on lower side are POWERGRID, ONGC. ASHOKLEY
options.
RELIANCE and DRREDDY.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 22.90
`1,69,761/- cr. to `1,98,794/- cr. Stock futures open
points against a premium of 35.70 points to its spot. Next
interest has increased from `52,726/- cr. to `53,000/- cr.
month future is trading with premium of 56.65 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are HDFCBANK,
week are AMBUJACEM, MARUTI, HINDALCO, LT and
BANKBARODA, INDUSINDBK, RELIANCE and INFY. Stocks
TATASTEEL. On the other hand unwinding was visible in
with negative CoC are JUSTDIAL, HAVELLS, IDEA,
counters like M&M, LUPIN, HCLTECH, ONGC and ITC.
HCLTECH and BATAINDIA.
Derivative Strategy
Scrip: ITC
CMP : `321.50
Lot Size : 1600
Exercise Date (F & O) :
28th Apr 2016
View: Volatile within range
Strategy: Short Strangle.
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
SELL
1600
ITC
330
APR
CE
3.50
295
(`8.50)
SELL
1600
ITC
310
APR
PE
3.00
305
`1.50
LBEP - ` 303.50/-
UBEP - ` 336.50/-
315
`6.50
Max. Risk: Unlimited
Max. Profit: `10,400/-
325
`6.50
If ITC continues to move below LBEP or above UBEP
If ITC closes between two strike price on expiry.
on expiry.
335
`1.50
NOTE: Profit can be booked before expiry if ITC remains in a range and time value decays.
345
(`8.50)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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