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Technical and Derivatives Review

| October 09, 2020

Nifty within the kissing distance of 12000

Sensex (40509) / Nifty (11914)

Source: Trading View

Future outlook

We have seen a spectacular comeback by the bulls after the recent hiccup towards 10800. From the next day onwards, the market

just took off with the help of a few heavyweight themes. Initially, it was the IT space that took the charge and lifted markets higher

from the critical levels along with some participation from the banking space. In fact, the momentum kept accelerating in the week

gone by; courtesy to some excellent news flow in the IT giant, TCS to lift the overall sentiments for other peers as well. Addition to

this, HDFC twins joined the party and had stellar moves throughout the week. Any robust rally in the market is incomplete without

the contribution of the banking space. On Friday, post the RBI policy, banking stocks attracted tremendous buying interest to

eventually end the week at a new seven month high for Nifty above the 11900 mark.

In the last couple of weeks’ rally, global markets played the major part as we are seeing some gravity defying moves despite some in

between uncertainty. Initially, in our recovery mode, we were a bit skeptical but in the first half of the week, we had to admit the

miss and eventually started participating in the move. The way Nifty surpassed the 31st August high of 11794 with some authority

and is now within the kissing distance of 12000, the positivity is likely to extend further. Importantly, the banking space which was

following the benchmark in the entire recovery finally showed some dominance on Friday. This factor is very much in favor of the

bulls, which may provide impetus for the extended rally. Now, the only missing factor is the participation from the broader market. If

we look at the Nifty Midcap index in the last 7-8 sessions, they remained muted throughout and only a handful of heavyweight

themes lifted the market higher. Hence, if Midcap index breaks out from recent congestion, it will be then considered as a healthy

rally. Let see how things pan out in the next couple of sessions.

Now as far as levels are concerned, the base has shifted higher and the previous resistance area of 11700 – 11450 should now be

treated as a strong support. On the flipside, we are very much close to the psychological mark of 12000. The moment it’s taken out,

we may see a steady move towards 12200 – 12400 levels. Since, the banking index is back to 200-day SMA on the daily chart and the

way it closed with complete gush in the space, a move beyond 24000 would provide strong support to the benchmark index.

However, we would like to highlight that since the move is extremely swift, anytime we can see some intraday profit booking and

hence, one needs to position accordingly and be very fussy in stock selection.

For Private Circulation Only

Technical and Derivatives Review

| October 09, 2020

FIIs Long Short Ratio surged to 72%

Nifty spot closed at 11914.20 this week, against a close of 11416.95 last week. The Put-Call Ratio has increased from 1.57 to 1.60.

The annualized Cost of Carry is positive at 2.39%. The Open Interest of Nifty Futures has increased by 28.40%.

Derivatives View

Nifty current month future closed with a premium of 15.60 points against a premium of 18.60 points to its spot. Next month future

is trading at a premium of 39.95 points.

Post last week’s remarkable move, we saw follow-up buying to surpass the hurdles of 11600 followed by 11800. We concluded the

week 4.32% higher to the previous weeks close; however, this wasn’t possible without BankNifty which rallied more than 7%. We

saw addition of long positions in both the indices. In Nifty options, the build-up was scattered between 12100-12700 call options

along with unwinding in 12000 strikes. On the other side, decent amount of writing was seen in 11500-11900 put options. Stronger

hands too continued their buying streak in equities, index futures and stock futures. The above data points remains optimistic;

hence, traders are advised to continue trading with a positive bias.

Weekly change in OI

Short Form

ation

Scrip

Futures

Chg (%)

Price

Chg(%)

MGL 1593000 27.34 827.85 (4.43)

ESCORTS

3076700

25.93

1227.20

(4.92)

RECLTD

21318000

25.15

98.50

(4.09)

BALKRISIND

1873600

21.47

1413.75

(3.71)

AMARAJABAT

1047000

18.57

743.30

(1.62)

Long Formati

Scrip

Futures

Chg (%)

Price

Chg(%)

LICHSGFIN 9840000 31.80 307.65 9.10

GODREJPROP

800800

28.07

917.35

5.50

MOTHERSUMI

27139000

24.94

121.45

4.07

TCS

7636200

24.37

2815.40

11.47

CANBK

15595000

23.18

92.45

3.53

For Private Circulation Only

Technical and Derivatives Review

| October 09, 2020

Research Team Tel: 022 - 39357600 (Extn – 6844) Website: www.angelbroking.com

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Technical and Derivatives Team:

Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com

Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jain@angelbroking.com

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com

Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com