Technical and Derivatives Review | January 11, 2019
Traders keenly awaiting breakout from recent congestion
Sensex (36010) / Nifty (10795)
Source: Trading View
Future outlook
Last Friday’s sharp recovery was followed by a gap up opening on Monday, citing positive cues from the global peers. However, the
kind of follow up buying was needed after such head start, was clearly missing. Hence, we saw restricted moves on the same day
and in fact, throughout the remaining part of the week. There were couple of attempts made to break this range on either sides; but
index failed to do so and eventually closed at the midpoint of the weekly range by adding over six tenths of a percent from the
previous week’s close.
The entire week was boredom for the traders’ fraternity as we saw Nifty consolidating in a slender range of merely 140 points, which
is way below its average weekly range. Market participants were keenly awaiting a decisive breakout from this range; but every
attempt (on both sides) eventually turned unsuccessful. Technically speaking, prices have been vacillating within the boundaries of a
‘Triangle’ as well as the ‘Diamond’ pattern and we are very close to the apex point. With reference to intra-week articles, when
prices approach the apex point, we tend to see breakout in either direction and thereby would widen the trading range as well. As a
trader, one must keep a close eye on two key levels i.e. 10870 on the higher side and 10733 on the downside. Considering the
overall development in the broader market as well as the heavyweight banking basket, our inclination is more on the positive side. A
move beyond the higher end of 10870 would unfold the next leg of the rally towards 10970 - 11150 levels. However, in case of a
breach below 10733, it would certainly not bode well for the bulls.
In such scenarios, one should wait for a confirmation to place aggressive bets. Until then a prudent strategy would be to focus on
individual stocks by following a proper exit strategy.
For Private Circulation Only
1
Technical and Derivatives Review | January 11, 2019
Stronger hands forming mixed positions
Nifty spot closed at 10794.95 this week, against a close of 10727.35 last week. The Put-Call Ratio has increased from 1.34 to 1.39.
The annualized Cost of Carry is positive at 5.52%. The Open Interest of Nifty Futures has decreased by 1.29%.
Derivatives View
Nifty current month future closed with a premium of 32.65 points against a premium of 50.25 points to its spot. Next month future
is trading with a premium of 66.65 points.
As far as Nifty options activities for the week are concerned, we saw decent open interest addition in, 11000 call option. Whereas,
10700 - 10900 put options added some fresh positions. Maximum open interest for January series now stands at 11200 call and
10500 put options.
It was indeed the week of boredom for our market, as the benchmark index remained in the slender range of merely 140 points.
Eventually, we concluded the week tad below 10800 mark. In Index futures front, we saw mixed activity in Nifty as well as BankNifty.
Despite some intraday selling on Friday we could hardly see any kind of covering by put writer, which is certainly building hopes for
the bulls. At current juncture, 10700-10750 is an immediate base for the index; whereas, 10880-10900 is the wall of resistance.
Unless we don’t see index surpassing the above mentioned range traders are advised to prefer trading in individual counters to fetch
better risk-reward ratio.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
TORNTPHARM
672000
45.61
1877.40
3.74
CEATLTD
1024400
52.99
1266.40
(3.89)
SREINFRA
15264000
27.84
34.85
4.97
ZEEL
16179800
29.55
453.40
(2.86)
DISHTV
63824000
23.25
40.20
1.64
INDUSINDBK
8957700
28.95
1524.00
(2.22)
MUTHOOTFIN
2625000
22.38
531.20
5.45
INDIACEM
21960000
28.90
87.45
(6.27)
BATAINDIA
2437050
20.97
1154.70
3.45
CHENNPETRO
1398600
26.75
261.75
(8.97)
Weekly change in OI
For Private Circulation Only
2
Technical and Derivatives Review | January 11, 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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