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For Private Circulation Only
Technical and Derivatives Review | March 13, 2020
Coronavirus pandemic creates havoc in market
Sensex (34103) / Nifty (9955)
Source: Trading View
Future outlook
Early this week, we had mentioned about this fall probably a brutal one in last 12 years. Clearly, we are driven by fear and sentiments on
the back of coronavirus pandemic across the globe. We had a terrible start for the week on Monday and if we call this worse, then probably
worst was yet to come. On Thursday, benchmarks opened with a deeper cut and went on to thrash more than 8% at the close. This
extended fall with combination of meltdown in global markets created complete panic in our markets. This resulted into our markets hitting
a lower circuit of 10% in the opening trades itself on Friday. Whatever happened that was yet another incidence of how this market has
turned abnormal in nature. We resumed trading after 45 minutes of halt and before anyone could realize, markets started rebounding
quite swiftly. Within a blink of an eye, we were considerably off lows and in fact the upward momentum aggravated as the day progressed
to post biggest ever intraday recovery.
In last few sessions, the INDIA VIX, which is also called as the fear index, has risen quite sharply and has ended the week above the 50 mark.
Higher the volatility index, market tends to move steeply and hence, the market is likely to continue with some large swings in the near
term. The immediate resistance for the index is seen around 10200 and if we surpass the same, then next levels to watch would be around
the 50% retracement mark of the recent fall which is seen around 10400. On the flipside, 9700 and 9400 would be seen as the immediate
support levels. All eyes would continue to be on the developments with respect to the Corona Virus cases which is likely to dictate the near
term movement. Traders are advised to avoid leverage positions and trade with a proper risk management strategy.
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For Private Circulation Only
Technical and Derivatives Review | March 13, 2020
Volatility at 12 year high
Nifty spot closed at 9955.20 this week, against a close of 10989.45 last week. The Put-Call Ratio has decreased from 1.25 to 1.11.
The annualized Cost of Carry is negative at 16.22%. The Open Interest of Nifty Futures has decreased by 8.17%.
Derivatives View
Nifty current month future closed with a discount of 57.50 points against a discount of 49.55 points to its spot. Next month future is
trading with a discount of 11.90 points.
As far as Nifty options activities for the week are concerned, we saw unwinding in put options of strikes 10000 and above. Maximum
open interest for the monthly series now stands at 12000 followed by 10000 call options and on flipside, 9000 put option has highest
open interest.
During the week, the indices continued to plunge and registered a low of 8555 on Friday when it hit the day’s lower limit. It
recovered the losses post re-opening and ended the week tad below 10000 mark. FII’s continued their selling streak in the cash
segment and they sold net equities worth Rs. 19614 crores during the week. In index futures segment, they covered some of their
short positions on Friday. Their ‘Long Short’ ratio now stands around 22%. India VIX rose sharply during the week and has ended
above the 50 mark which is a major cause of concern. Hence, the index is likely to trade with higher volatility in the near term. Until
we see a drop in the volatility index, we are unlikely to see sustained move on the upside and hence, we continue with our advice for
traders to avoid taking undue risk for short term.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
IDEA 750876000 57.52 5.65 68.66
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Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
PVR 2632400 73.96 1203.25 (25.96)
VEDL 80402000 15.26 84.35 (24.35)
NIITTECH 745500 35.24 1389.40 (22.35)
BANDHANBNK 5737200 28.49 328.15 (19.03)
MINDTREE 1791200 49.97 833.25 (14.44)
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For Private Circulation Only
Technical and Derivatives Review | March 13, 2020
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearch-cs[email protected]ngelbroking.com
For Derivatives Queries E-mail: derivatives.d[email protected]angelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.c[email protected]broking.com
Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com
Sneha Seth Derivatives Analyst sneha.set[email protected]ng.com