Technical and Derivatives Review | July 12, 2019
11430 - A last ray of hope for the bulls
Sensex (38736) / Nifty (11552)
Source: Trading View
Future outlook
Last Friday post the Budget announcement, market participants looked disappointed, which triggered this massive sell off, especially in
some of the marquee outperformers. To make it worse, we had a decent gap down on Monday which accelerated as the day progressed.
Eventually, Monday’s session turned out to be the weakest day of the current calendar year. Fortunately, this mayhem got arrested on the
following day and then we witnessed a mild recovery throughout the remaining part of the week to eventually conclude with a cut over a
couple of percent.
Last week’s low of 11461 holds lot of significance because it coincides with multiple technical evidences such as, (i) 61.8% retracement of
recent rally (11108 - 12103), (ii) Trend line joining previous lows and (iii) The vicinity of the bullish gap formed after exit poll numbers. For a
time being, market has respected this crucial junction but going ahead, it would be important to see how index behaves around it. In case
of a breakdown below 11460 - 11430, the selloff is likely to escalate to test lower levels 11250 - 11230 or even a move towards May lows
(11108) cannot be ruled out. So till the time we are above it, there is still a final ray of hope for the bulls. However, on the upside, previous
support of 11640 is now acting as a sturdy wall. Hence, if index has to regain any strength, it needs to convincingly surpass this hurdle of
11640 - 11700. For a time being, 11430 - 11640 would be seen as a crucial range for the index.
At present, traders are advised to stay light and avoid taking any undue risks. As mentioned in the above section, any existing longs should
be exited if index breaches key support of 11460 - 11430 convincingly. On the sectoral front, there were some notable moves seen in the
Auto and Metal spaces towards the latter half of the week. So if market manages to hold its support, we would see sharp pull backs in these
names. Also, midcap index had an encouraging move despite the benchmark tumbled in the final hour. Do watch out for this universe as
well.
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Technical and Derivatives Review | July 12, 2019
FIIs ‘Long Short Ratio’ plunged below 50%
Nifty spot closed at 11552.50 this week, against a close of 11811.15 last week. The Put-Call Ratio has increased from 1.09 to 1.15.
The annualized Cost of Carry is negative at 1.98%. The Open Interest of Nifty Futures has increased by 2.22%.
Derivatives View
Nifty current month future closed with a discount of 8.15 points against a premium of 9.80 points to its spot. Next month future is
trading with a premium of 47.25 points.
As far as Nifty options activities for the week are concerned, we saw good amount of build-up in 11600-11800 and 12000 call
options. On the other side, 11200-11400 puts added decent positions Maximum open interest for the monthly series now stands at
12000 call and 11300 put option.
Post Friday’s sharp fall, we started-off the week with a downside gap and witnessed follow-up selling to drag index towards 11450
mark. However, 11450-11500 acted as support zone and we saw some short covering move in next 2-3 session to reclaim 11600. On
Friday, index surpassed 11600 mark but couldn’t sustain at higher levels as we saw sharp fall in final hour to conclude the week 2%
lower. In index futures segment, we saw mixed activity throughout the week. At present, 11450-11500 is an immediate support;
whereas, 11600-11650 shall act as a hurdle. Until index trades between the above mentioned range, traders are advised to stay light
in index and prefer trading in individual counters.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
PVR
827600
46.53
1731.00
3.65
RECLTD
62490000
97.78
149.35
(10.54)
DISHTV
104258000
21.31
31.25
2.46
INDIGO
4456800
70.76
1353.85
(13.65)
RELINFRA
17732000
17.49
49.35
2.49
BATAINDIA
2165900
43.72
1341.90
(7.01)
TVSMOTOR
7818800
15.56
429.90
1.66
BSOFT
3340500
29.45
74.90
(15.98)
CUMMINSIND
1925000
12.02
750.85
2.80
BHEL
52132500
27.17
65.05
(7.47)
Weekly change in OI
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Technical and Derivatives Review | July 12, 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
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Technical and Derivatives Review | July 12, 2019
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