December 12, 2015
Technical Picks |
Nifty nearing strong support of 7540
Sensex (25044) / Nifty (7610)
Trading for the week began with a marginal upside gap on
Exhibit 1: Nifty Weekly chart
Monday, citing a massive rally on the US bourses on the previous
Friday. However, our markets failed to keep the momentum
going; in fact, the Nifty shaved off all the early gains and
eventually went on to close the day with a loss of 0.21%. The
next couple of sessions were clearly dominated by the bears
and in the process, the Nifty went on to test the 7600 mark. On
Thursday, we witnessed a minor bounce, proving to be a much
required breather of the bulls. However, this small up move
also got sold into on Friday as the Nifty slipped below the 7600
Source: Falcon
mark during the session. The index ended yet another week in
Exhibit 2: Nifty Daily chart
the red, with a cut of over 2%.
Pattern formation:
The '89-day EMA' and the '89-week EMA' for the Sensex/
Nifty are placed at 26454 / 8012 and 25988 / 7844 levels,
respectively.
The '20-day EMA' and the '20-week EMA' for the Sensex/
Nifty are placed at 25786 / 7912 and 26446 / 8013 levels,
respectively.
Source: Falcon
Future outlook
manages to hold the 7540 mark, then we may witness an
Despite some positive cues on the global front during the
immediate bounce towards 7700 - 7800 levels. We believe the
beginning of the week, our markets clearly showed their lack
downside in the Nifty, if any, would be restrained going further
of strength as four out of the five sessions of the week ended
even in the eventuality of the index breaching below the 7540
well inside the negative territory. In our last report, we had
mark. If this is to happen, then the next strong support zone (of
mentioned about the strong support of 7700. Unfortunately,
'Downward Sloping Trend Line 'on Weekly chart) is placed slightly
this support was breached during the first half of the week,
lower at 7440 - 7400 levels. Thus, traders are advised to make
which resulted in a sharp correction towards the mentioned
a note of both these scenarios for the forthcoming week. We
level of 7600. The Nifty is now approaching its recent low of
recommend trading with a proper exit strategy and avoiding
7539.50, which would now be seen as a strong and a crucial
undue risks.
support level. We are seeing early signs of the 'Two Points Positive
Divergence' in the daily 'RSI' momentum oscillator; if the Nifty
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December 12, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,398
24,721
25,253
25,576
26,109
NIFTY
7,420
7,515
7,670
7,765
7,920
NIFTY BANK
15,773
16,058
16,545
16,830
17,317
ACC
1,276
1,298
1,327
1,348
1,377
ADANIPORTS
226
234
246
254
266
AMBUJACEM
181
185
192
196
203
ASIANPAINT
817
838
858
878
898
AXISBANK
419
430
448
459
477
BAJAJ-AUTO
2,326
2,371
2,428
2,473
2,530
BANKBARODA
139
147
159
167
178
BHEL
160
163
167
170
174
BPCL
837
865
895
923
954
BHARTIARTL
297
303
314
320
330
BOSCH
17,643
17,933
18,353
18,643
19,063
CAIRN
117
121
130
134
143
CIPLA
604
622
638
656
672
COALINDIA
285
297
317
329
349
DRREDDY
2,787
2,878
3,042
3,133
3,296
GAIL
316
327
345
356
374
GRASIM
3,490
3,556
3,673
3,739
3,856
HCLTECH
814
827
848
861
881
HDFC
1,024
1,035
1,053
1,064
1,082
HDFCBANK
1,133
1,154
1,171
1,192
1,209
HEROMOTOCO
2,422
2,474
2,568
2,620
2,715
HINDALCO
69
73
77
80
84
HINDUNILVR
797
810
825
837
852
ICICIBANK
236
243
254
260
271
IDEA
126
129
134
137
143
INDUSINDBK
877
896
927
947
977
INFY
1,006
1,029
1,046
1,070
1,086
ITC
297
309
322
334
348
KOTAKBANK
653
660
671
679
689
LT
1,230
1,258
1,305
1,333
1,380
LUPIN
1,607
1,674
1,755
1,821
1,902
M&M
1,191
1,226
1,280
1,315
1,368
MARUTI
4,275
4,378
4,509
4,612
4,743
NTPC
126
129
131
135
137
ONGC
203
209
219
225
235
POWERGRID
125
126
129
131
134
PNB
112
117
127
132
142
RELIANCE
886
920
946
980
1,006
SBIN
214
221
232
238
250
SUNPHARMA
709
734
758
782
806
TCS
2,288
2,337
2,364
2,414
2,441
TATAMOTORS
355
367
387
398
418
TATAPOWER
59
60
63
64
67
TATASTEEL
215
228
238
251
260
TECHM
513
525
536
548
558
ULTRACEMCO
2,651
2,717
2,807
2,873
2,963
VEDL
74
79
86
91
98
WIPRO
549
557
568
577
587
YESBANK
626
653
700
727
773
ZEEL
379
388
397
406
415
Technical Research Team
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Derivatives Review |
Square-off short positions; limited downside from here
Nifty spot closed at 7610.45 this week against a close of 7781.90 last week. The Put-Call Ratio has decreased from 0.79 to 0.76
levels and the annualized Cost of Carry is positive at 4.18%. The Open Interest of Nifty Futures increased by 1.67%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.79 to 0.76 levels mainly due to
Implied Volatility (IV) for NIFTY has increased from 14.57% to
open interest addition in call options. In call options, 7600 to
15.63%. Historical volatility (HV) of NIFTY is at 15.97% and
8000 strikes added good amount of OI, followed by unwinding
that for BANKNIFTY is trading at 21.94%. Liquid counters having
in 8100-8300 call options. While in put options, 7400-7600
very high HV are ITC, ABIRLANUVO, GRASIM, ASIANPAINT
strikes added decent buildup. Some profit booking was also
and UNITECH. Stocks where HV are on lower side are
visible in 7800-7900 strikes. Maximum buildup in current series
PETRONET, MRF, MARUTI, CANBK and DRREDDY.
is seen in 8000 call & 7500 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 17.45 points
`2,08,293/- cr. to `2,26,596/- cr. Stock futures open interest
against a premium of 38.60 points to its spot. Next month
has decreased from `63,989/- cr. to `62,986/- cr. Liquid
future is trading with premium of 54.50 points. Liquid counters
counters names which added significant positions last week
where CoC is high are IDFC, BANKBARODA, JINDALSTEL,
are DRREDDY, ACC, PNB, TATAMOTORS and ONGC. On the
HINDALCO and ICICIBANK. Stocks with negative CoC are
other hand unwinding was visible in counters like SUNPHARMA,
NMDC, PNB, ACC, GRASIM and NTPC.
TCS, NTPC, BHEL and TATASTEEL.
Derivative Strategy
Scrip : HINDALCO
CMP : 76.70
Lot Size : 5000
Exercise Date (F & O) :
31st Dec 2015
View: Mildly Bullish
Strategy: Long Call
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
5000
HINDALCO
80
DEC
CE
1.25
74
(`1.50)
BEP
-
`81.25
77
(`1.50)
80
(`1.50)
Max. Risk: `6,250/-
Max. Profit: Unlimited
If HINDALCO closes on or below strike price on expiry.
If HINDALCO continues to move above BEP on expiry.
83
`1.50
86
`4.50
NOTE: Profit can be booked before expiry if HINDALCO moves in favorable direction.
89
`7.50
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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)