Technical Picks | June 11, 2016
Market in a consolidation mode; still, avoid shorts
Sensex (26636) / Nifty (8170)
Our market started the proceedings for the week on Monday
Exhibit 1: Nifty Weekly chart
on a flat note citing muted global cues. The entire trading
session on Monday remained subdued where the Nifty was
restricted within a small trading range. On Tuesday, we
witnessed some encouraging price action as the Nifty tried to
overcome the 8300 mark, although it was unable to. The
same attempt was made on the following day, but once
again the index failed to surpass this level. The Nifty then
shied into a consolidation mode and corrected a bit in
trading over the remaining part of the week. Owing to the
prevalence of a middle negative bias in the market, the Nifty
trimmed 0.62% over its previous week’s close and concluded
the week convincingly below the 8200 mark.
Source: Company, Angel Research
Key Moving Averages:
The ’89-day EMA’ and the ’89-week EMA’ for the
Exhibit 2: Nifty Daily chart
Sensex/Nifty are placed at
25574
/
7818 and
25645 / 7778 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
26371
/
8084 and
25616 / 7823 levels, respectively.
Future outlook
We clearly witnessed a tug of war between the bulls and the
bears as both the counterparties made their presence felt in
the concluded week’s trading. In technical terms, this
development can be termed as a ‘Consolidation Phase’ after
a strong rally. Since the last few days, we have been
Source: Company, Angel Research
mentioning about the immediate support level of ‘5 Day
Thus, traders are advised not to create fresh short positions
EMA’. The Nifty has now closed a tad below this short term
for such a limited downside; in fact, we suggest towards
moving average, which generally indicates weakness. But
using these dips as a buying opportunity. On the flipside,
considering multiple supportive technical evidences at a gap
8265 - 8336 are seen as immediate hurdles for the index.
of every 40 - 50 points on the lower side, we do not expect
In the upcoming week, we expect the consolidation phase to
any major correction in the index. Firstly, a support in the
continue and we would therefore advice on following a
form of the ‘Parabolic SAR’ stands at 8147 which coincides
stock-specific approach to find potential trades on both sides
with hourly ’89 EMA’. It is followed by the Daily ’20 EMA’ as
(long and short).
well as the ‘Super Trend’ indicator at 8080.
For Private Circulation Only
1
Technical Picks | June 11, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
26,302
26,469
26,787
26,954
27,272
NIFTY
8,077
8,124
8,209
8,256
8,341
NIFTY BANK
17,424
17,627
17,839
18,041
18,254
ACC
1,513
1,535
1,547
1,568
1,581
ADANIPORTS
190
197
202
208
214
AMBUJACEM
223
229
234
241
246
ASIANPAINT
959
975
1,006
1,023
1,054
AUROPHARMA
700
722
758
779
815
AXISBANK
517
529
539
551
561
BAJAJ-AUTO
2,508
2,544
2,601
2,637
2,694
BANKBARODA
135
140
146
152
157
BHEL
113
118
122
128
132
BPCL
948
968
988
1,008
1,029
BHARTIARTL
341
346
352
358
364
INFRATEL
363
369
377
382
390
BOSCH
20,788
21,140
21,752
22,105
22,717
CIPLA
455
466
476
487
497
COALINDIA
297
302
309
314
321
DRREDDY
2,967
3,016
3,100
3,149
3,233
EICHERMOT
18,023
18,321
18,733
19,031
19,443
GAIL
358
364
372
377
386
GRASIM
4,185
4,248
4,315
4,378
4,446
HCLTECH
699
725
742
768
784
HDFCBANK
1,136
1,148
1,165
1,178
1,195
HDFC
1,203
1,217
1,242
1,256
1,281
HEROMOTOCO
2,981
3,025
3,102
3,147
3,224
HINDALCO
101
108
112
119
123
HINDUNILVR
848
861
885
898
921
ICICIBANK
233
243
252
262
271
IDEA
101
102
105
106
108
INDUSINDBK
1,074
1,092
1,111
1,129
1,148
INFY
1,112
1,146
1,204
1,239
1,297
ITC
340
346
355
360
370
KOTAKBANK
722
736
758
772
793
LT
1,434
1,461
1,488
1,515
1,541
LUPIN
1,362
1,400
1,432
1,470
1,502
M&M
1,337
1,356
1,381
1,400
1,424
MARUTI
4,026
4,069
4,143
4,186
4,260
NTPC
144
148
150
154
157
ONGC
205
211
217
224
229
POWERGRID
146
150
153
157
159
RELIANCE
935
956
970
991
1,005
SBIN
190
198
205
213
221
SUNPHARMA
694
718
734
758
774
TCS
2,497
2,526
2,583
2,612
2,668
TATAMTRDVR
301
307
316
322
331
TATAMOTORS
439
448
459
468
479
TATAPOWER
71
74
75
78
80
TATASTEEL
323
329
338
343
352
TECHM
516
527
539
550
563
ULTRACEMCO
3,114
3,249
3,325
3,460
3,535
WIPRO
528
537
542
551
556
YESBANK
1,013
1,038
1,062
1,087
1,110
ZEEL
444
451
459
466
473
Technical Research Team
For Private Circulation Only
2
Derivatives Review | June 11, 2016
FIIs muted activity indicates further consolidation
Nifty spot closed at 8170.05 this week, against a close of 8156.65 last week. The Put-Call Ratio has increased from 1.05 to 1.12
levels and the annualized Cost of Carry is positive at 4.55%. The Open Interest of Nifty Futures increased by 1.97%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 1.05 to 1.12 levels, mainly due
Implied Volatility (IV) for NIFTY has increased from 13.10%
to OI addition in put options. In call options, we witnessed
to 14.64%. Historical volatility (HV) of NIFTY is at 15.84%
good build-up in 8300 strike. While in put options, 8000 -
and that for BANKNIFTY is at 20.70%. Liquid counters
8200 strikes added huge fresh positions; followed by some
having very high HV are JSWENERGY, PTC, TATAGLOBAL,
unwinding in 7900 - 7800 strikes. Maximum OI in current
BEL and FEDERALBNK. Stocks where HV are on lower side
series is visible in 8300 call and 8000 put options.
are IDEA, TATACHEM, CANBK, PFC and CUMMINSIND.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 20.35
`2,18,307/- cr. to `2,35,754/- cr. Stock futures open
points against a premium of 18.10 points to its spot. Next
interest has increased from `64,537/- cr. to `66,521/- cr.
month future is trading with premium of 50.50 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are TATAMTRDVR,
week are HEROMOTOCO, INFRATEL, M&M, ITC and INFY.
LUPIN, MARUTI, ITC and COALINDIA. Stocks with
On the other hand unwinding was visible in counters like
negative CoC are CANBK, JUSTDIAL, SOUTHBANK,
HCLTECH, TATASTEEL, BANKBARODA, TATAMOTORS and
ICICIBANK and SAIL.
ICICIBANK.
Derivative Strategy
Scrip: ONGC
CMP : 219.00
Lot Size : 2000
Exercise Date (F & O) :
30th June 2016
View : Mildly Bullish
Strategy: Ratio Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
2000
ONGC
220
JUNE
CE
4.70
200
(`1.00)
SELL
4000
ONGC
230
JUNE
PE
1.85
210
(`1.00)
UBEP - `239.00
LBEP - `221.00
220
(`1.00)
230
`9.00
Max. Risk: Unlimited/-
Max. Profit:
`18,000
If ONGC continues to move above UBEP.
If ONGC closes at `230 on expiry.
240
(`1.00)
NOTE: Profit can be booked before expiry if ONGC moves in favourable direction.
250
(`11.00)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
DISCLAIMER
Angel Broking Private 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 of India Limited. It is also registered as a Depository Participant with
CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private 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 including its relatives/analyst do not hold any financial interest/beneficial
ownership of more than 1% in the company covered by Analyst. 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. Angel/analyst
has not served as an officer, director or employee of company covered by Analyst and has not been engaged in market making activity
of the company covered by Analyst.
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.
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 Pvt. 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 Pvt. 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 Pvt. 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 Pvt. 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.
Note: Please refer to the important ‘Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the
latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may
have investment positions in the stocks recommended in this report.
For Private Circulation Only
4