Technical Picks | February 13, 2016
Avoid shorting; Wait for further developments
Sensex (22986) / Nifty (6981)
Exhibit 1: Nifty Weekly chart
Despite an extremely negative session on previous week’s
Friday, our markets still managed to open the week on an
almost flattish note, which was some sign of strength.
Subsequently, the Nifty traded within a narrow range while a
positive bias was being witnessed across the broader
market. However, a sharp selloff in the concluding hour of
the day pulled the index significantly lower from the day’s
high and led it to end the session with a loss of nearly a
percent and a half. Such pessimism continued in the
sessions to follow. But the same got alarmingly aggravated
on Thursday where the bears, in a show of complete
dominance, dragged down the Nifty below the 7000 mark
(on a closing basis), which is for the first time since May 09,
2014. The Nifty closed the week with a humongous cut of
Source: Company, Angel Research
6.79% over the previous week’s closing.
Exhibit 2: Nifty Daily chart
Pattern formation:
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at 25417 / 7704 and 25771 /
7790 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at 24342 / 7360 and 25387 /
7712 levels, respectively.
Future outlook
It was a dreadful week for the equity markets across the
globe. Mounting uncertainty on the global front along with
domestic concerns spooked our markets right from the
Source: Company, Angel Research
opening day of the week. Honestly speaking, Thursday’s
massive selloff caught us completely on the wrong foot as
A move beyond the high of 7035 may lead to some
we were not expecting this correction to breach the 7120
immediate bounce back towards
7090
-
7150 levels.
mark on the Nifty, even in the worst case scenario. Although,
Although the Nifty is very near to its strong supports,
we are now seeing a strong support zone on the monthly
considering the current scenario, we would rather wait for a
chart, it won't be fair to keep discussing support levels which
reversal sign on the weekly chart or a ‘Higher Top - Higher
are getting brutally thrashed one after another. Going
Bottom’ structure on the daily chart to expect a strong
forward, 6870 (April 25, 2014 high as well as the Weekly
bounce from the current level. On the upside, 7150 - 7200
‘200 SMA’ level) and 6790 (50% retracement level of the
are now being seen as strong hurdles for the index in the
large up move from 4531.15 to 9119.20 and ’20 EMA’ on
forthcoming week. Thus, we need to closely observe if the
the quarterly chart) levels should render strong support to
Nifty is able to approach the above mentioned resistance
the Nifty. On the smaller (daily) degree chart, Friday’s
zone. Traders are advised to stay light on positions and keep
candle can be termed as a ‘Bullish Hammer’ pattern.
monitoring above mentioned key levels.
For Private Circulation Only
1
Technical Picks | February 13, 2016
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
21,330
22,158
23,428
24,257
25,527
NIFTY
6,477
6,729
7,121
7,373
7,764
NIFTY BANK
12,826
13,399
14,383
14,956
15,941
ACC
1,133
1,177
1,243
1,288
1,354
ADANIPORTS
140
159
188
207
236
AMBUJACEM
182
188
195
201
207
ASIANPAINT
809
832
870
893
931
AXISBANK
349
370
394
415
439
BAJAJ-AUTO
2,176
2,240
2,315
2,379
2,454
BANKBARODA
94
104
119
129
145
BHEL
79
92
115
127
151
BPCL
705
739
796
830
887
BHARTIARTL
294
309
320
335
345
BOSCH
15,248
15,598
16,086
16,437
16,925
CAIRN
102
111
120
128
137
CIPLA
482
505
541
564
599
COALINDIA
275
289
309
323
343
DRREDDY
2,633
2,740
2,932
3,039
3,231
GAIL
291
308
332
349
373
GRASIM
3,217
3,300
3,409
3,492
3,601
HCLTECH
733
766
817
850
901
HDFC
906
939
998
1,031
1,090
HDFCBANK
981
1,033
1,109
1,160
1,237
HEROMOTOCO
2,370
2,430
2,513
2,572
2,656
HINDALCO
51
56
64
69
77
HINDUNILVR
760
786
817
843
874
ICICIBANK
175
184
200
209
225
IDEA
92
101
106
115
120
INDUSINDBK
729
770
841
882
952
INFY
1,003
1,044
1,108
1,149
1,213
ITC
280
290
307
318
335
KOTAKBANK
562
592
643
673
725
LT
934
994
1,076
1,136
1,218
LUPIN
1,611
1,684
1,798
1,870
1,985
M&M
1,018
1,092
1,165
1,238
1,311
MARUTI
3,272
3,411
3,600
3,739
3,928
NTPC
117
121
124
127
130
ONGC
168
181
200
213
233
POWERGRID
128
133
140
145
151
PNB
56
65
81
90
107
RELIANCE
830
868
926
965
1,023
SBIN
131
143
160
172
189
SUNPHARMA
763
805
845
887
927
TCS
2,020
2,123
2,268
2,371
2,516
TATAMOTORS
231
264
300
334
369
TATAPOWER
52
54
58
60
63
TATASTEEL
191
204
224
237
257
TECHM
389
410
446
466
503
ULTRACEMCO
2,579
2,673
2,774
2,869
2,970
VEDL
48
56
66
73
83
WIPRO
477
497
529
549
581
YESBANK
639
684
737
781
834
ZEEL
329
350
382
403
435
Technical Research Team
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2
Derivatives Review | February 13, 2016
It’s not shorting, but sentimental selling in markets
Nifty spot closed at 6980.95 this week, against a close of 7489.10 last week. The Put-Call Ratio has decreased from 0.83 to 0.78
levels and the annualized Cost of Carry is positive at 3.64%. The Open Interest of Nifty Futures increased by 16.96%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.83 to 0.78 levels due to
Implied Volatility (IV) for NIFTY has increased from 16.07%
open interest addition in call options. In call options, 7000-
to 20.97%. Historical volatility (HV) of NIFTY is at 25.04%
7400 strikes remain active and they also added good
and that for BANKNIFTY is at 31.62%. Liquid counters
amount of OI. We believe these positions in call options are
having very high HV are VOLTAS, JUBLFOOD, BHEL,
blend of long and short positions. While in put options,
TATAGLOBAL and UCOBANK. Stocks where HV are on
6800 and 6900 strikes added decent build-up, followed by
lower side are CROMPGREAV, APOLLOHOSP, KSCL,
unwinding in 7300-7500 put options. Maximum build-up in
AMBUJACEM and EICHERMOT.
current series is seen in 7500 call options and 7000 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 9.05
`2,08,436/- cr. to `2,35,101/- cr. Stock futures open
points against a premium of 30.10 points to its spot. Next
interest has decreased from `60,685/- cr. to `56,213/- cr.
month future is trading with premium of 27.95 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are VEDL, COALINDIA,
week are PNB, BHEL, TATAMOTORS, BPCL and WIPRO. On
INDUSINDBK, RELIANCE and POWERGRID. Stocks with
the other hand unwinding was visible in counters like
negative CoC are NMDC, PNB, BANKBARODA,
CAIRN, TATASTEEL, NTPC, AXISBANK and BAJAJ-AUTO.
AMBUJACEM and GAIL.
Derivative Strategy
Scrip: AXISBANK
CMP : `391.30
Lot Size : 1000
Exercise Date (F & O) :
25th Feb 2016
View: Mildly Bullish
Strategy: Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
1000
AXISBANK
400
FEB
CE
8.00
385
(`5.00)
SELL
1000
AXISBANK
420
FEB
CE
3.00
397
(`5.00)
BEP - `405.00
409
`4.00
Max. Risk: `5000
Max. Profit: `15,000
If AXISBANK continues to move below `400 on
If AXISBANK closes on or above `420 levels on expiry
421
`15.00
expiry
433
`15.00
NOTE: Profit can be booked before expiry if AXISBANK moves in favourable direction and time value decays.
445
`15.00
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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