October 10, 2015
Technical Picks |
Market in a corridor of uncertainty
Sensex (27080) / Nifty (8190)
Trading for the week started off with a surprising gap-up opening
Exhibit 1: Nifty Weekly chart
on the Nifty on Monday owing to positive cues from the global
bourses. The buying interest accelerated as the day progressed
and as a result, the index posted a mammoth single-day gain
of over 2% for the day. This was followed by yet another gap up
opening on Tuesday, but the optimism was not of the same
scale as the previous day. The remaining sessions of the week
saw the Nifty slip into a consolidation mode; eventually the
index concluded the week a tad below the 8200 mark. Barring
nominal loss from the IT pack, all other sectors posted massive
Source: Falcon
gains amongst which, the Metal, Banking, Capital Goods and
Exhibit 2: Nifty Daily chart
Oil & Gas were the major contributors. The Nifty ended the
week with gains of 3% over the previous week's close.
Pattern formation:
„ The '89-day EMA' and the '89-week EMA' are placed at
26902 / 8157 and 25936 / 7824 levels, respectively.
„ The '20-day EMA' and the '20-week EMA' are placed at
26293 / 8000 and 26967 / 8180 levels, respectively.
Future outlook
Source: Falcon
Trading for the week started off on a cheerful note on Monday
observe the daily chart, it is clearly seen that the recent rally
post the modest recovery witnessed in the market in the previous
from the lower levels is moving within the boundaries of an
week. The Nifty saw a gap-up opening on the day, led by positive
'Upward Sloping Channel' and the Nifty is now currently trading
global cues. The ecstatic bulls extended this up-move, leading
around the higher end of the pattern. Moreover, on the
the Nifty to overcome the 8055 mark, which was the neckline
candlestick front, Friday's daily candle can be termed as a 'Long
resistance level of the 'Inverse Head and Shoulders' pattern on
Legged Doji' pattern. An occurrence of the said pattern near
the smaller degree (daily) chart. Though we were not
the resistance zone certainly does not bode well for the bulls.
aggressively optimistic on the market, we had to accept this
Going forward, a sustainable move below Friday's low of
move, and we then reassessed our short term directional
8139.65 may apply brakes on the ongoing optimism. In this
viewpoint. In in-line with our revised view, post the confirmation
scenario, an immediate correction towards 8050 - 8000 cannot
of the aforementioned pattern, the Nifty tested the level of 8225.
be ruled out. On the flipside, if the Nifty manages to surpass
At this juncture, we are seeing a cluster of resistances around
the 8232.20 mark, then we may witness a continuation of this
8225 - 8250 levels. Firstly, the higher end of the downside gap
up-move towards 8280 - 8320 levels. In either scenario, we
area created on August 24, 2015 as well as the 100% 'Price
advise traders to remain light on positions and adopt a stock
Extension' of the previous up move (7539.50 to 8055) from
centric approach until the Nifty gives a clear direction.
the recent low of 7691.20 is at 8225. Further, if we meticulously
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October 10, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
26,060
26,570
26,885
27,395
27,710
NIFTY
7,915
8,052
8,142
8,280
8,369
BANKNIFTY
17,129
17,360
17,593
17,824
18,058
ACC
1,298
1,323
1,354
1,378
1,409
AMBUJACEM
203
206
209
213
216
ASIANPAINT
818
836
860
878
902
AXISBANK
463
477
498
511
532
BAJAJ-AUTO
2,241
2,346
2,416
2,520
2,590
BANKBARODA
175
179
185
188
195
BHEL
192
197
202
207
211
BPCL
810
829
857
876
903
BHARTIARTL
331
340
345
353
359
BOSCH LIMITED
18,518
19,894
20,777
22,154
23,036
CAIRN
143
156
164
177
185
CIPLA
613
652
672
710
730
COALINDIA
311
323
336
349
361
DRREDDY
4,102
4,180
4,242
4,320
4,382
GAIL
283
297
306
321
330
GRASIM
3,471
3,557
3,623
3,709
3,775
HCLTECH
784
817
844
876
903
HDFCBANK
1,057
1,072
1,090
1,104
1,122
HDFC
1,172
1,232
1,265
1,325
1,359
HEROMOTOCO
2,380
2,473
2,527
2,620
2,674
HINDALCO
66
75
80
89
94
HINDUNILVR
786
802
817
833
848
ICICIBANK
267
276
282
292
298
IDEA
145
151
156
162
167
INDUSINDBK
912
926
948
962
984
INFY
1,096
1,131
1,162
1,198
1,229
ITC
317
330
340
353
363
KOTAKBANK
626
643
654
671
682
LT
1,478
1,512
1,538
1,573
1,599
LUPIN
1,969
2,012
2,071
2,114
2,172
M&M
1,232
1,253
1,276
1,296
1,319
MARUTI
4,062
4,169
4,370
4,477
4,677
NMDC
91
93
95
98
100
NTPC
121
123
127
129
133
ONGC
217
240
253
276
289
POWERGRID
129
131
133
134
136
PNB
130
134
138
142
146
RELIANCE
833
860
889
916
945
SBIN
232
238
243
248
253
SUNPHARMA
853
880
907
933
961
TCS
2,507
2,568
2,669
2,730
2,831
TATAMOTORS
283
320
339
376
396
TATAPOWER
64
67
69
72
74
TATASTEEL
201
226
239
265
278
TECHM
543
552
565
575
588
ULTRACEMCO
2,667
2,743
2,811
2,887
2,955
VEDANTA
75
89
97
111
119
WIPRO
571
582
596
607
621
YESBANK
698
712
734
748
771
ZEEL
386
394
400
408
414
Technical Research Team
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Derivatives Review |
FIIs going long in Index Futures
Nifty spot closed at 8189.70 this week against a close of 7950.90 last week. The Put-Call Ratio has increased from 0.91 to 1.02 levels
and the annualized Cost of Carry is positive at 3.49%. The Open Interest of Nifty Futures increased by 14.17%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.91 to 1.02 levels mainly due to
Implied Volatility (IV) for NIFTY has decreased from 17.60% to
open interest addition in put options. Huge buildup was visible
16.35%. Historical volatility (HV) of NIFTY is at 22.91% and
in 7900 to 8200 put options last week which are mostly long
that for BANKNIFTY is trading at 31.78%. Liquid counters having
formation. Good amount of unwinding was seen in 7500 put
very high HV are JINDALSTEL, UNITECH, ITC, PFC and VEDL.
options. On the other hand in call options some build-up was
Stocks where HV are on lower side are AMBUJACEM, IDBI,
visible in 8300-8500 strikes followed by unwinding in 7900-
L&TFH, HEXAWARE and FEDERALBNK.
8000 put options. Maximum buildup in current series is seen in
8300 call & 8100 put options.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 15.65 points
`1,90,872/- cr. to `2,15,556/- cr. Stock futures open interest
against a premium of 26.05 points to its spot. Next month
has increased from `55,991/- cr. to `59,100/- cr. Liquid
future is trading with premium of 58.05 points. Liquid counters
counters names which added significant positions last week
where CoC is high are VEDL, LT, JINDALSTEL, WIPRO and IDFC.
are NMDC, VEDL, MARUTI, IDFC and INFY. On the other hand
Stocks with negative CoC are NMDC, HINDUNILVR, CAIRN,
unwinding was visible in counters like TATAMOTORS,
HCLTECH and INFY.
HEROMOTOCO, CIPLA, AMBUJACEM and ICICIBANK.
Derivative Strategy
Scrip : LT
CMP : `1554.45
Lot Size : 125
Exercise Date (F & O) :
29th. Oct 2015
View: Mildly Bearish
Strategy: Long Put Ladder
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(Rs)
(Rs)
Profit/Loss
BUY
125
LT
1500
OCT
PE
20.00
1340
(`17.00)
SELL
125
LT
1450
OCT
PE
9.00
1390
`33.00
SELL
125
LT
1400
OCT
PE
4.00
1440
`43.00
LBEP
-
`1357/-
UBEP - `1493/-
1490
`3.00
Max. Risk: Unlimited
Max. Profit: `5,375/-
1540
(`7.00)
If LT continues to move below LBEP.
If LT closes between 1450 & 1400 levels on expiry.
1590
(`7.00)
NOTE: Profit can be booked before expiry if LT moves in favorable direction and time value decays.
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Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
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over 12 months investment period):
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Sell (< -15)