Technical Picks | July 9, 2016
Nifty gearing up for next leg of rally
Sensex (27127) / Nifty (8323)
Exhibit 1: Nifty Weekly chart
The Nifty kick-started the week with an upside gap of around
half a percent on Monday, thus carrying on with its previous
week’s momentum. Subsequently, we saw the index
gradually head towards the 8400 mark but the strong selling
that followed dragged it lower to close the day around its
opening levels. On Tuesday, the index looked tentative right
from the opening trade and ended the session with a cut of
nearly half a percent. The next two consecutive sessions saw
the market trade in a lackluster mode with a slightly negative
bias. Eventually, the Nifty ended the week flat, i.e. with a
negligible loss of 0.06% over its previous week’s close.
Key Moving Averages:
Source: Company, Angel Research
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
25998
/
7960 and
Exhibit 2: Nifty Daily chart
25746 / 7817 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
26805
/
8230 and
26023 / 7959 levels, respectively.
Future outlook
Post the v-shaped recovery from the ‘BREXIT’ verdict day’s
low of 7927, the Nifty slipped into a consolidation mode
after posting a high of 8398.45. During the week gone by,
the Nifty oscillated in a narrow range of 111 points and
eventually managed to defend the
8300 mark. The
momentum readings on the hourly chart were in overbought
Source: Company, Angel Research
territory after the up move on Monday and usually, when in
an overbought zone, prices either undergo a price-wise or
Hence, traders are advised to trade with a positive bias and
time-wise correction before resuming with the uptrend. Our
be prepared for the next leg of the up move. As per the
interpretation of last week’s consolidation is of it being a
weekly chart, the next major resistance stands at 8654.75
‘Time-wise’ correction. The previous resistance zone of 8240
(July 2015 high) on the Nifty and we are expecting the index
- 8300 acted as a sheet anchor in terms of extending
to gradually ascend towards this hurdle. The immediate
support to the market, and we expect it to hold well in the
resistance levels are seen at 8420 and 8540.
forthcoming week as well. In fact, one of the notable
observations that is adding more conviction to our bullish
stance on the market is the Nifty having entered a new ‘Time
Zone’ (of 34 sessions) on 24th May as per the ‘Fibonacci
Time Series’ which will be completed on Monday, 11th July.
This previous time zone provided bullish momentum to our
market and we expect the Nifty to resume its uptrend after
entering the new ‘Time Zone’ (of 55 sessions).
For Private Circulation Only
1
Technical Picks | July 9, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
26,831
26,979
27,182
27,330
27,534
NIFTY
8,226
8,274
8,336
8,385
8,447
NIFTY BANK
17,789
17,903
18,025
18,138
18,260
ACC
1,541
1,569
1,598
1,626
1,654
ADANIPORTS
198
202
209
214
221
AMBUJACEM
248
253
257
262
266
ASIANPAINT
970
990
1,004
1,024
1,037
AUROPHARMA
734
756
769
792
805
AXISBANK
524
535
542
553
560
BAJAJ-AUTO
2,528
2,566
2,628
2,666
2,728
BANKBARODA
148
151
157
160
166
BHEL
129
133
138
142
146
BPCL
1,075
1,095
1,109
1,129
1,144
BHARTIARTL
338
347
361
370
384
INFRATEL
328
336
349
357
369
BOSCH
21,863
22,326
22,588
23,051
23,313
CIPLA
495
508
515
528
535
COALINDIA
300
306
316
322
332
DRREDDY
3,363
3,462
3,517
3,616
3,671
EICHERMOT
19,051
19,251
19,450
19,650
19,849
GAIL
356
366
384
394
412
GRASIM
4,427
4,484
4,577
4,634
4,727
HCLTECH
694
708
729
743
764
HDFCBANK
1,147
1,161
1,175
1,189
1,203
HDFC
1,222
1,255
1,278
1,311
1,334
HEROMOTOCO
3,056
3,112
3,151
3,207
3,246
HINDALCO
121
124
126
129
132
HINDUNILVR
872
896
911
936
951
ICICIBANK
233
237
244
249
256
IDEA
96
99
103
106
111
INDUSINDBK
1,083
1,105
1,118
1,140
1,153
INFY
1,128
1,143
1,169
1,184
1,210
ITC
236
241
247
253
259
KOTAKBANK
727
735
746
754
764
LT
1,486
1,509
1,546
1,569
1,606
LUPIN
1,470
1,554
1,633
1,718
1,797
M&M
1,425
1,439
1,462
1,476
1,498
MARUTI
4,086
4,124
4,163
4,201
4,240
NTPC
146
150
154
158
162
ONGC
213
218
227
232
241
POWERGRID
157
161
164
168
171
RELIANCE
958
968
986
996
1,013
SBIN
211
215
220
223
229
SUNPHARMA
755
766
776
787
796
TCS
2,330
2,378
2,452
2,500
2,574
TATAMTRDVR
283
289
297
304
311
TATAMOTORS
444
455
465
476
486
TATAPOWER
71
72
74
75
77
TATASTEEL
297
308
323
333
348
TECHM
484
493
509
518
534
ULTRACEMCO
3,278
3,339
3,407
3,468
3,536
WIPRO
549
555
562
568
574
YESBANK
1,089
1,105
1,122
1,138
1,156
ZEEL
433
443
456
466
480
Technical Research Team
For Private Circulation Only
2
Derivatives Review | July 9, 2016
Market hovering near its strong support, buy on dips
Nifty spot closed at 8323.20 this week, against a close of 8328.35 last week. The Put-Call Ratio has increased from 0.98 to 1.04
levels and the annualized Cost of Carry is positive at 3.63%. The Open Interest of Nifty Futures decreased by 1.78%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.98 to 1.04 levels. In call
Implied Volatility (IV) for NIFTY has decreased from
options, 8400 & 8600 strikes added some fresh build-up.
14.36% to 13.79%. Historical volatility (HV) of NIFTY is at
While in put options, good amount of OI addition was
16.82% and that for BANKNIFTY is at 20.80%. Liquid
visible in 8100-8300 strikes, some build-up was also seen
counters having very high HV are ALBK, PNB, MRF,
in 7800 and 7900 put strikes. Maximum OI in current
SYNDIBANK and IDBI. Stocks where HV are on lower side
series is visible in 8500 call and 8200 put options.
are CROMPGREAV, INDIACEM, AMBUJACEM, AXISBANK
and IDEA.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 13.25
`1,92,806/- cr. to `2,15,713/- cr. Stock futures open
points against a premium of 26.80 points to its spot. Next
interest has increased from `61,460/- cr. to `64,607/- cr.
month future is trading with premium of 50.15 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are GRASIM,
week are BPCL, ACC, TCS, INDUSINDBK and
HINDALCO, ITC, RELIANCE and IDEA. Stocks with
TATAPOWER. On the other hand unwinding was visible in
negative CoC are TECHM, TATASTEEL, TATAPOWER, BPCL
counters like BOSCHLTD, WIPRO, ITC, AUROPHARMA and
and HDFC.
HEROMOTOCO.
Derivative Strategy
Scrip: BANKNIFTY
CMP : 18059.50
Lot Size : 40
Exercise Date (F & O) :
28th July 2016
View : Mildly Bullish
Strategy: Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
40
BANKNIFTY
18000
JULY
CE
300.00
17700
(`200.00)
SELL
40
BANKNIFTY
18500
JULY
CE
100.00
18000
(`200.00)
BEP - `18200/-
18300
`100.00
Max. Risk: `8,000/-
Max. Profit: `12,000/-
If BANKNIFTY closes on or below BEP on expiry.
If BANKNIFTY closes above on or above18500 level
18600
`300.00
on expiry.
18900
`300.00
Profit can be booked before expiry if BANKNIFTY moves in favourable direction and time value decays.
19200
`300.00
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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