Technical and Derivatives Review | October 12, 2018
Finally some relief on the street, likely to extend further
Sensex (34734 ) / Nifty (10473)
Source: Trading View
Future outlook
During the week, our markets defending the key support level of 10200 on a closing basis was certainly a remarkable achievement. It
was clearly an indication that the sellers have exhausted and they do not have further strength to react to the global hiccups. Hence,
we had a gap up opening on the concluding day of the week with a good bump up and in fact, the momentum accelerated as the day
progressed. In the course of action, we are back to Wednesday’s highs by ending the week on a cheerful note.
Finally, the recent losing streak came to an end as we not only managed to defend the critical support level of 10200 but also ended
the week with a good hope of further recovery in the forthcoming week. Last week, we had highlighted few notable observations
and all those key technical evidences have proved their significance. Despite unfavourable global cues, our markets showed
tremendous resilience after correcting 78.6% of the entire up move from 9951.90 to 11760.20. Also, this key support zone coincided
with the weekly 89 EMA and thus, the relief was very much on cards. Now, the question is, are we done with the correction or this is
just a temporary relief rally? In our sense, it would be too early to judge this as a completion of the corrective phase. But, one thing
we are convinced with is, we are heading for further bounce back in the coming week. As far as levels are concerned, we expect the
natural extension to be around 10650 - 10750 and then one need to reassess the situation after meeting these probable junctions.
On the downside, 10322 followed by 10187 would be seen as key support levels.
Momentum traders are advised to ride this relief move with strict stop losses. It would be a prudent strategy to focus on midcap
universe, which has taken a u-turn from important supports and is now likely to witness further relief. But having said that; we
would like to give a piece of advice to momentum traders, it’s better to adopt a stock centric approach and look to take timely
profits off the table.
For Private Circulation Only
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Technical and Derivatives Review | October 12, 2018
Call writer ran for shelter seeing Friday’s strong move
Nifty spot closed at 10472.50 this week, against a close of 10316.45 last week. The Put-Call Ratio has increased from 1.07 to 1.20
and the annualized Cost of Carry is positive at 3.77%. The Open Interest of Nifty Futures decreased by 1.80%.
Derivatives View
Nifty current month future closed with a premium of 14.05 points against a premium of 30.70 points to its spot. Next month future
is trading with a premium of 61.90 points.
As far as Nifty options activities for the week are concerned, we saw fresh open interest addition in 10300-10600 call options. On the
flip side, 9800 and 10000 put options added fresh positions along with unwinding in 10500-10700 strikes. Maximum open interest
for October series now stood at 11000 followed by 10800 call and 10000 followed by 10400 put options.
It was indeed a volatile week for our market as we saw index correcting below 10200 on Monday but saw decent recovery towards
10500. On Thursday, we had a massive gap down opening below 10200 mark, this was again bought into to eventually conclude
above 10400. At present, we expect extension of recent upmove towards 10600-10650 mark; thus, traders are advised trading with
the positive bias for next week.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
ADANIPOWER
173520000
8.00
32.75
39.07
NIITTECH
1841250
37.92
1050.05
(9.75)
YESBANK
104034000
14.18
247.55
19.47
HCLTECH
8404200
17.09
989.30
(9.21)
IOC
33612000
17.52
134.40
14.04
TCS
10031500
20.47
1922.35
(9.04)
PVR
1154000
5.83
1329.40
13.68
MINDTREE
4638000
9.12
951.30
(8.79)
PTC
9784000
3.38
75.10
11.92
SOUTHBANK
137767137
9.31
12.75
(8.60)
Weekly change in OI
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2
Technical and Derivatives Review | October 12, 2018
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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