September 12, 2015
Technical Picks |
Just a relief rally - stay light on positions
Sensex (25610) / Nifty (7789)
The Nifty started the proceedings for the week marginally lower
Exhibit 1: Nifty Weekly chart
on Monday, owing to mildly negative cues from the global
bourses. The previous week's pessimism continued and the Nifty
conceded the 7600 mark. However, during the next couple of
sessions, we witnessed a secular v-shaped recovery in the
broader market. On Thursday, despite a gap down opening,
our market managed to trim losses and then maintained its
position around the 7800 mark. The week concluded on a
positive note. On the sectoral front, the most beaten down
spaces like, Banking, Capital Goods and Auto gave a decent
Source: Falcon
bounce back; whereas, the Consumer Durables, FMCG and
Exhibit 2: Nifty Daily chart
Healthcare counters remained under pressure. After a massive
correction and three consecutive weeks of negative closings,
the Nifty managed to close the concluded week in the positive
territory by gaining 1.75% over the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27205 / 8242 and 25903 / 7807 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
26123 / 7930 and 27287 / 8367 levels, respectively.
Source: Falcon
Going forward, it would be important for the Nifty to sustain
Future outlook
above this level in order to extend this up move towards
Finally, after three weeks of severe pain, the bulls had something
7920 - 7980 levels. However, it must be noted that the
to cheer about. On Monday, the Nifty extended its previous
directional view still remains negative and thus, traders are
week's losses and went on to register a new thirteen-month
advised not to trade aggressively in this bounce. In fact,
low. This low of 7539.50 precisely coincided with the August
momentum traders should focus on stock specific moves and
2013 low as well as the 38.2% retracement level of the entire
should lighten up their positions in the bounce. On the downside,
rally from 5118.85 (August 2013 low) to 9119.20 (March 2015
the immediate support levels on the Nifty are seen at
high). In addition, the daily 'RSI-Smoothened' oscillator was at
7670 - 7540 levels. A breach of 7540 would trigger further
the lowest point since August 2011. Thus, a short term bounce
weakness in the market. The market continues to be afflicted
in the market was expected. In line of our anticipation, and as
with volatility; traders are therefore advised to stay with the
had been mentioned in our intra-week reports, the Nifty
broader trend and not be in a hurry to do any bottom fishing.
rebounded towards the 7850 mark in the latter half of the week.
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September 12, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,397
25,004
25,440
26,046
26,482
NIFTY
7,406
7,598
7,731
7,923
8,057
BANKNIFTY
15,366
15,989
16,385
17,009
17,405
ACC
1,299
1,333
1,364
1,398
1,428
AMBUJACEM
198
203
210
214
221
ASIANPAINT
759
788
806
835
853
AXISBANK
426
454
474
502
523
BAJAJ-AUTO
2,120
2,223
2,279
2,381
2,437
BANKBARODA
162
172
178
188
195
BHEL
189
200
209
220
230
BPCL
793
822
840
869
888
BHARTIARTL
325
337
351
363
378
BOSCH LIMITED
20,002
20,967
21,706
22,671
23,410
CAIRN
134
140
147
152
159
CIPLA
604
628
648
673
693
COALINDIA
321
327
340
346
358
DRREDDY
3,744
3,879
3,987
4,122
4,230
GAIL
259
272
285
298
311
GRASIM
3,278
3,370
3,443
3,535
3,608
HCLTECH
878
899
928
949
977
HDFCBANK
956
983
1,004
1,031
1,052
HDFC
1,106
1,141
1,172
1,207
1,239
HEROMOTOCO
2,211
2,277
2,323
2,390
2,436
HINDALCO
68
72
76
80
83
HINDUNILVR
746
771
802
827
859
ICICIBANK
239
254
262
276
284
IDEA
137
143
149
155
161
INDUSINDBK
783
826
856
899
929
INFY
1,029
1,060
1,083
1,114
1,137
ITC
305
310
315
319
324
KOTAKBANK
576
604
623
651
670
LT
1,435
1,519
1,574
1,658
1,714
LUPIN
1,693
1,752
1,814
1,873
1,936
M&M
1,049
1,108
1,151
1,210
1,254
MARUTI
3,926
4,122
4,241
4,437
4,556
NMDC
88
94
100
106
111
NTPC
109
114
118
123
127
ONGC
218
223
229
233
239
POWERGRID
115
120
125
130
135
PNB
123
129
133
139
144
RELIANCE
801
831
855
885
909
SBIN
214
222
228
236
243
SUNPHARMA
791
819
842
870
893
TCS
2,496
2,524
2,551
2,579
2,606
TATAMOTORS
297
321
340
364
383
TATAPOWER
53
56
59
62
65
TATASTEEL
202
218
231
246
259
TECHM
503
514
531
542
559
ULTRACEMCO
2,727
2,834
2,917
3,024
3,107
VEDANTA
81
89
96
104
111
WIPRO
530
544
559
574
588
YESBANK
608
659
693
745
778
ZEEL
342
367
383
408
424
Technical Research Team
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September 12, 2015
Derivatives Review |
IV's rising despite market bouncing back
Nifty spot closed at 7789.30 this week against a close of 7655.05 last week. The Put-Call Ratio has decreased from 0.96 to 0.93
levels and the annualized Cost of Carry is positive at 0.02%. The Open Interest of Nifty Futures increased by 2.23%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.96 to 0.93 levels mainly due to
Implied Volatility (IV) for NIFTY has increased from 26.11% to
open interest addition in call options. Good amount of buildup
26.37%. Historical volatility (HV) of NIFTY is at 29.78% and
was visible in 7800-8000 call options last week, followed by
that for BANKNIFTY is trading at 40.56%. Liquid counters having
unwinding in 8200 and 8500 strikes. On the other hand in put
very high HV are NMDC, APOLLOHOSP, SRTRANSFIN,
options build-up was scattered in the range 7100-7700 strikes.
AMTEKAUTO and COLPAL. Stocks where HV are on lower side
Maximum buildup in current series is seen in 8500 call & 7500
are TCS, CIPLA, BAJFINANCE, BIOCON and SYNDIBANK.
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 0.05 points
`2,17,471/- cr. to `2,31,093/- cr. Stock futures open interest
against a premium of 9.30 points to its spot. Next month future
has increased from `54,671/- cr. to `56,897/- cr. Liquid
is trading with premium of 34.00 points. Liquid counters where
counters names which added significant positions last week
CoC is high are AMBUJACEM, SBIN, JINDALSTEL, BPCL and
are AMBUJACEM, POWERGRID, BPCL, COALINDIA and
LUPIN. Stocks with negative CoC are NMDC, POWERGRID,
HINDUNILVR. On the other hand unwinding was visible in
BHEL, GRASIM and KOTAKBANK.
counters like NMDC, PNB, KOTAKBANK, HINDALCO and
LUPIN.
Derivative Strategy
Scrip : SUNPHARMA
CMP : `846.25
Lot Size : 250
Exercise Date (F & O) :
24th. Sept 2015
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
250
SUNPHARMA
860
SEPT
CE
18.00
830
(`4.00)
SELL
500
SUNPHARMA
900
SEPT
CE
7.00
855
(`4.00)
LBEP
-
`864/-
UBEP - `936/-
880
`16.00
905
`31.00
Max. Risk: Unlimited
Max. Profit: `9,000/-
If SUNPHARMA continues to move above UBEP.
If SUNPHARMA at 900 levels level on expiry.
930
`6.00
NOTE: Profit can be booked before expiry if SUNPHARMA moves in favorable direction and time value decays.
955
(`19.00)
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Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
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Sell (< -15)