1
For Private Circulation Only
Technical and Derivatives Review | January 10, 2020
Floodgate finally opens for 12400 – 12500
Sensex (41600) / Nifty (12257)
Source: Trading View
Future outlook
Towards the fag end of the previous week, the tensions between US and Iran arose from nowhere and the small trailer of it was seen on
Friday (January 03) itself. However, the real repercussion of this development was seen on the first trading day of the week gone by. We
had a massive cut of nearly two percent to test sub-12000 levels. This continued till Wednesday’s opening point as things started to look
extremely scary. Fortunately, things cooled off with respect to this as no follow up action was seen from both countries thereafter. This
resulted into a v-shaped recovery in our market after an overreaction seen in the first half. Eventually, Nifty managed to close in the
positive territory and now, knocking on the doors for new milestones.
The action packed week with wild swings finally ended in the favour of mighty bulls and going by the famous phrase All’s well that ends
well’, the wider smile is back on the faces of market participants. This Friday, we continued our northward trajectory and with the help of
complete gush, managed to clock fresh record highs beyond 12300. However, due to decent profit booking in the latter half, Nifty came off
considerably from highs but not to worry, the overall structure still looks sturdy. Once we manage to reclaim 12300 again, we will not be
surprised to see index heading towards next milestones of 12400 – 12500 in the forthcoming week itself. On the lower side, 12200 followed
by 12140 would be seen as immediate supports.
Traders are advised not to be adventurous by taking positions against the major direction. We have already seen the consequences of
shorting this market in the week gone by. However, the real highlight was the sheer outperformance of the mid and small cap baskets. We
have been quite vocal on this space of late and the way it’s shaped up, we expect stellar moves from the broader end of the spectrum. Do
watch out for potential candidates from this universe along with the ‘Auto’ counters who are poised for good moves in the near future.
2
For Private Circulation Only
Technical and Derivatives Review | January 10, 2020
Massive writing in 12200-12300 put options
Nifty spot closed at 12256.80 this week, against a close of 12226.65 last week. The Put-Call Ratio has increased from 1.37 to 1.55.
The annualized Cost of Carry is positive at 4.94%. The Open Interest of Nifty Futures has increased by 13.16%.
Derivatives View
Nifty current month future closed with a premium of 33.20 points against a premium of 29.80 points to its spot. Next month future
is trading with a premium of 73.90 points.
As far as Nifty options activities for the week are concerned, we saw fresh build-up in 12400-12500 call options followed by
unwinding in 12700-12800 strikes. On the other side, fresh writing was seen in 11800-12200 put options. Maximum open interest
for the monthly series now stands at 12000 put and 12500 call option.
We began the week with a downside gap on account of the rising geopolitical conflicts and then the selling aggravated to plunge
below the important psychological support zone of12000 mark. In the next two sessions, we saw an extension of this selling almost
towards 11900 mark; however, we witnessed a V-shaped recovery on Wednesday’s session. Then we saw fresh buying interest in
the next two sessions to eventually conclude the week on a positive note. In F&O space, we witnessed fresh long formation in both
the indices. At the same time, call writers covered their positions and added fresh longs in 12400-12500 strikes. The put writers of
the weekly series shifted the base higher from 12000 to 12200 strike, which is again a sign of further strength. Analyzing the above
data points, we expect a continuation of last week’s rally towards 12400-12500.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
v 7124400 45.34 465.10 7.71
NIITTECH 784875 27.39 1711.05 4.80
L&TFH 36327200 18.55 121.90 2.83
GMRINFRA 188595000 14.38 24.05 5.48
JINDALSTEL 29545000 13.77 177.45 2.99
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
BIOCON 13648200 23.99 281.45 (6.88)
MGL 2133000 16.71 1007.05 (5.56)
GLENMARK 6798400 15.23 348.05 (1.69)
EICHERMOT 352680 14.34 20537.05 (3.64)
ASHOKLEY 64528000 12.65 81.75 (2.79)
3
For Private Circulation Only
Technical and Derivatives Review | January 10, 2020
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearch-cso@angelbroking.com
For Derivatives Queries E-mail: derivatives.desk@angelbroking.com
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and Portfolio
Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Limited is a
registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and
risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources
believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for
general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or
damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has
not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any
representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking
Limited endeavors to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or
other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.c[email protected]ngelbroking.com
Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]ngelbroking.com
Sneha Seth Derivatives Analyst sneha.s[email protected]ngelbroking.com