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Technical and Derivatives Review | October 11, 2019
For Private Circulation Only
Index defends key support, remain optimist for near term
Sensex (38127) / Nifty (11305)
Source: Trading View
Future outlook
This week started with a continuation of the previous week’s negative momentum and the index approached its support zone of 11100 on
Monday. As mentioned in our last week’s update, this was the last ray of hope for our market and hence this support gained traders
attention. Post the mid-week holiday, the markets witnessed a sharp surge in Wednesday’s session and with some volatility in last couple of
sessions, it managed to end the week tad above the 11300 mark.
During the early week, we had our fingers crossed around the 11100 mark and were hopeful of a bounce back from this support. This was
mainly because this level had a confluence of supports. Firstly, it was the recent breakout level which was seen on the day of our FM
announcing the corporate tax rate cut. This coincided with the 50 DMA as well as the 200 SMA on the hourly chart. The index has bounced
back higher from this level and thus, it now becomes a sacrosanct for the near term. In last couple of sessions, the indices (especially Bank
Nifty) has traded with higher volatility but has managed to end the week well above its support. Hence, we are optimistic on the markets
from the near term perspective and advise traders to look for buying opportunities from a short term perspective. This positive view will
remain intact till the index trades above the swing low of 11090 and hence, this level could be referred as a stop loss on the long positions.
On the higher side, 11400 is the immediate resistance for Nifty, but we expect it to be taken out soon and could then see a trended move in
the broader markets to resume the uptrend. Above 11400, the Nifty could rally towards 11560-11630 which will be immediate target range
to watch for.
Amongst the sectorial indices, the daily range for the Bank Nifty has widened drastically and has become extremely challenging for traders
to place their bets. The key support for Bank Nifty is seen around 27500-27000. As far as this support is intact, one can remain hopeful for
some good moves in upward direction. On the Nifty Metal index we have witnessed a bullish engulfing pattern on the daily chart which is a
bullish reversal pattern. Sooner or later, we sense some buying to emerge in stocks within this space too.
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Technical and Derivatives Review | October 11, 2019
For Private Circulation Only
Base has now shifted to 11100-11200, stay long
Nifty spot closed at 11305.05 this week, against a close of 11174.75 last week. The Put-Call Ratio has increased from 0.97 to 1.14.
The annualized Cost of Carry is positive at 0.80%. The Open Interest of Nifty Futures has decreased by 3.23%.
Derivatives View
Nifty current month future closed with a premium of 6.65 points against a premium of 40.35 points to its spot. Next month future is
trading with a premium of 54.20 points.
As far as Nifty options activities for the week are concerned, expect for some build-up in 11300 strike, we hardly saw any relevant
open interest addition in call options. However, unwinding was seen in 11500-12000 call options. On the other side, 11000-11300
puts added good amount of positions. Maximum open interest for the monthly series now stands at 11500 call and 11000 put
option.
We saw some rub-off effect of previous weeks fall on Monday to almost touch the support zone of 11000-11150. Post mid-week
holiday, we saw a sharp recovery from the mentioned support and as the week progressed the benchmark index marching towards
11400. In F&O segment, we saw decent short covering in both Nifty as well as BankNifty. At the same time, 11000-11300 puts
writers added good amount of positions; whereas, fresh buying was witnessed in 11300 call option. Considering last week’s
development, we expect continuation of recent rally towards 11450-11500; hence, traders are advised using declines to add-on
fresh longs.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
BERGEPAINT 6652800 44.76 454.75 7.51
SIEMENS 1575200 28.60 1578.70 3.07
BATAINDIA 2784100 15.97 1706.75 1.69
BIOCON 12670200 11.46 246.40 6.48
PVR 986000 10.99 1798.90 0.93
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
NATIONALUM 71090000 105.17 39.85 (8.18)
IBULHSGFIN 28981600 38.50 206.85 (11.70)
AUROPHARMA 19835000 28.00 440.80 (22.79)
ICICIPRULI 6984000 26.97 439.00 (3.29)
PEL 7209948 13.41 1324.90 (12.39)
Weekly change in OI
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Technical and Derivatives Review | October 11, 2019
For Private Circulation Only
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearch-cso@angelbroking.com
For Derivatives Queries E-mail: derivatives.des[email protected]ngelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com
Ruchit Jain Technical Analyst ruchi[email protected]broking.com
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com
Sneha Seth Derivatives Analyst sneha.set[email protected]lbroking.com