Technical and Derivatives Review | May 10, 2019
11260 - 11200 are the levels to watch out for
Sensex (37463) / Nifty (11279)
Source: Trading View
Future outlook
We had a gap down opening on Monday by a fair margin on the back of mounting concerns over the trade war between two largest
economies, the US and the China. During the entire week, the uncertainty on this development kept looming over on the entire globe and
hence, along with global peers, we kept grinding lower to trim nearly four percent from the previous weekly close, posting biggest drop
after October 2018.
Since last few weeks, markets slipped into a consolidation mode and were struggling to overcome the 11800 convincingly. May be it was
sensing something of this sort, but it’s all easy to comment in the hindsight. All traders had a close eye on the sacrosanct level of 11549,
which gained tremendous respect on last couple of occasions. But, this level got thrashed brutally post this negative development and then
the selloff was evident. In line with this, within no time we are back to sub-11300 levels. Now, we would like to highlight few key technical
observations. Prices have now almost retraced 50% of the previous up move and have managed to test the daily ’89-EMA’ as well. Going by
the weekly time frame chart, this zone ideally should provide a decent support for our markets and hence, if any bounce back has to start,
it should probably begin from this crucial zone only. But as we all know, such global developments can be very deceptive. Also, we are
heading for yet another mega event on the domestic front i.e. the election verdict on May 23. All these events are likely to weigh down
heavily on traders’ sentiment and should probably set the path for next move.
At present, the pragmatic ploy would be to stay light and avoid trading aggressively in the market. Going by the broader chart structure, we
are still hopeful of some favorable moves post these events. In such difficult times, investors should be prepared with the list of marquee
propositions which can be accumulated in this decline.
For Private Circulation Only
1
Technical and Derivatives Review | May 10, 2019
No shorts in recent fall, buy on dips
Nifty spot closed at 11278.90 this week, against a close of 11712.25 last week. The Put-Call Ratio has decreased from 1. 49 to 1.30.
The annualized Cost of Carry is positive at 4.58%. The Open Interest of Nifty Futures has decreased by 7.54.
Derivatives View
Nifty current month future closed with a premium of 28.30 points against a premium of 52.05 points to its spot. Next month future
is trading with a premium of 73.65 points.
As far as Nifty options activities for the week are concerned, some fresh build-up was seen in 11500-12000 call options. On the other
side, 11000, 11300 and 11800 put options added some fresh OI. Maximum open interest for monthly May series now stands at
12000 call and 11000 put options.
We began the week with a downside gap mainly due to fresh concerns in trade war between US and China and we witnessed
follow-up selling thereafter. Post five week, Nifty corrected below 11550 and then further selling dragged index near the next
support of 11250-11270. We hardly saw any meaningful shorting in the correction of 3.70%, which is a good indication. At present
11200-11250 is an important support zone and looking at the recovery in individual counters, we expect some relief rally in the
coming week.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
PCJEWELLER
11433500
19.42
126.80
16.17
RELCAPITAL
12354000
14.33
117.90
(13.15)
CGPOWER
25272000
17.46
37.50
1.35
ESCORTS
5446100
37.53
600.55
(10.48)
SYNDIBANK
27765000
9.92
37.90
0.80
ZEEL
22358700
20.40
372.20
(10.14)
TATACOMM
2366000
6.53
560.55
0.77
BHARATFIN
7227000
36.24
894.95
(9.01)
MARICO
7404800
25.91
359.45
0.49
SIEMENS
1378850
21.82
1077.10
(8.81)
Weekly change in OI
For Private Circulation Only
2
Technical and Derivatives Review | May 10, 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
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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