Technical and Derivatives Review | August 09, 2019
11000 defended on weekly basis, further relief likely
Sensex (37582) / Nifty (11110)
Source: Trading View
Future outlook
In the midst of a global uncertainty, our markets opened lower with a decent margin on Monday. However, index managed to recover fair
bit of ground on the same day to reclaim the 10800 mark. On the subsequent day, index followed similar kind of pattern and showed first
sign of revival. Despite Wednesday’s weak session, index took off at the stroke of the penultimate hour on Thursday and we saw complete
gush in the market to see some sharp short covering moves. This lead was extended on Friday to eventually conclude the week with a
smart recovery of more than 300 points from the lowest point.
Fortunately, we managed to defend the 11000 mark on a weekly closing basis and the recovery started after precisely retesting some key
moving averages and Fibonacci ratios. Firstly, index tested the 61.8% retracement level of the previous up move. This point was coincided
with the ’89-EMA’ on weekly chart as well as 161% (Golden Ratio) of the recent small up move from 11108.30 to 12103.05. In addition, the
‘RSI-Smoothened’ oscillator on daily chart had reached the lowest level since October 15, 2018. All these key observations were hinting
towards the possibility of some relief from the crucial junction of 10800. Hence, we avoided shorting and in fact kept focusing on some
probable short covering candidates. The strategy played out well and we are back above 11100.
But the real question lies whether the worst is over or not? In our sense, it would be too early to comment on this and although, we have
taken a pause at crucial technical cluster of supports, we need to wait for some further confirmation. As of now, one should construe this
rally as a relief move and going ahead, 11200 - 11300 are the levels to watch out for. If we manage to surpass this wall, the next possible
resistance is placed in the zone of 11450 - 11500. At this juncture, the pragmatic approach would be to take one step at a time and focus
more on individual stocks. On the lower side, the immediate support is seen around 11062 - 10975 and with a broader view, as long as we
are defending 10782 - 10750, there is no reason to worry for.
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Technical and Derivatives Review | August 09, 2019
Short Covering pulls index back above 11000
Nifty spot closed at 11109.65 this week, against a close of 10997.35 last week. The Put-Call Ratio has increased from 1.18 to 1.24.
The annualized Cost of Carry is positive at 2.18%. The Open Interest of Nifty Futures has decreased by 0.53%.
Derivatives View
Nifty current month future closed with a premium of 13.30 points against a premium of 26.70 points to its spot. Next month future
is trading with a premium of 64.35 points.
As far as Nifty options activities for the week are concerned, we saw some build-up in 11200-11300 call options. On the other side,
10800-10700 puts added decent positions. Maximum open interest for the monthly series now stands at 11500 call and 10800 put
option.
As far as this week is concerned, we witnessed short covering move on the weekly expiry session as the call writes ran for cover in
the last hour of the expiry day. A follow-up upmove was seen in Friday’s session and the index has ended comfortably above the
11000 mark. During the week, the Nifty index hardly witnessed any change in OI whereas some short covering was seen in the
BankNifty. The options data indicates support for the coming week at 11000 followed by 10800 level whereas the immediate
resistance is around 11200. We may see the index trading within this range in the truncated week and hence traders are advised to
take a stock specific approach.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
BERGEPAINT
2948000
48.72
360.60
7.59
NBCC
47906000
29.77
34.70
(19.40)
BALKRISIND
2486400
32.09
772.95
8.81
BSOFT
3493500
26.62
63.05
(13.21)
UJJIVAN
7688000
18.70
290.10
4.48
PAGEIND
224600
15.79
17578.80
(3.69)
SRF
1065750
15.00
2903.40
10.18
SBIN
100086000
11.54
292.10
(5.90)
MARICO
11627200
11.24
393.30
5.10
UPL
14813100
10.91
535.05
(7.14)
Weekly change in OI
2
Technical and Derivatives Review | August 09, 2019
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
Website: www.angelbroking.com
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For Derivatives Queries
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