For Private Circulation Only
Technical and Derivatives Review
| March 13, 2021
15400 becomes a sturdy wall, key supports at 14925 - 14850
Sensex (50792) / Nifty (15031)
Source: Trading View
Future outlook
Trading for the week started on a flat note but as the week progressed, we witnessed a gradual up move in the market. The
optimism in global peers (especially the US bourses) was the main catalyst behind this strength in our markets. Almost each session
during the week started with a decent upside gap and importantly, it managed to hold on to it. The similar sort of strength was
visible on Friday as well at the opening as Nifty was very much on the move towards its record highs. However, all of a sudden
traders chose to take some money off the table and hence post the mid-session, we witnessed a sharp decline to not only pare
down all gains but also to sneak well inside the negative terrain.
Barring second half of Friday, market almost had a unidirectional move throughout the truncated week. However, post the gap up,
we did not see any major action in indices as they kept oscillating within a small range by maintaining their positive posture. The real
action was seen in individual themes which also were missing on Friday. Now with Friday’s move, 15200 15400 has become a
sturdy wall for Nifty and it would really be a daunting task surpassing this in the absence of any major trigger on the global as well as
domestic front. On the flipside, the key support is placed at 14925 14850. A sustainable violation of these supports would lead to
extended correction and in that case we may see Nifty sliding towards 14700 or may even test recent swing low of 14467. If we
meticulously observe the hourly chart, a breakdown from the ‘Rising Wedge’ pattern is clearly visible, which certainly does not bode
well for the bulls. All eyes would be on the global peers as they play a vital role in dictating the near term direction for our market.
On Friday, most of the sectoral indices too saw some decent profit booking. The banking and midcap indices are placed at a crucial
support. It would be interesting to see how they behave in the beginning of the forthcoming week. Apart from this, the Volatility
Index (VIX)’ which had cooled off this week and sneaked below the 19 mark, again surged to reclaim the 21 level. Further spike in
this fear index could lead to higher volatility in our market. Hence, traders are advised to stay light and should keep a close tab on all
the above mentioned levels.
For Private Circulation Only
Technical and Derivatives Review
| March 13, 2021
Short formation in banking index towards end of the week
Nifty spot closed at 15030.95 this week, against a close of 14938.10 last week. The Put-Call Ratio has decreased from 1.12 to 1.02.
The annualized Cost of Carry is positive at 3.82%. The Open Interest of Nifty Futures has decreased by 6.70%.
Derivatives View
Nifty current month future closed with a premium of 5.45 points against a premium of 14.95 points to its spot. Next month future is
trading at a premium of 76.20 points.
In options segment, fresh build-up was seen 15400-15500 call options. On the other side, 14800-14700 puts witnessed some
unwinding of positions. Maximum open interest for the weekly series in nearby strikes is placed at 15300 call and 15000 put options.
During the week, we saw a gradual upmove in markets ahead of the mid-week holiday. Nifty opened with a gap up above 15300 on
Friday, but suddenly it corrected sharply in the later half to conclude the week just above the 15000 mark.
We witnessed some short covering moves in the Nifty during the week as the index rallied; while no major build-up was seen in Bank
Nifty till Wednesday. However, when the markets corrected in the later half on Friday, traders preferred to form short positions in
the banking index where a rise in open interest was seen. FII’s preferred to lighten up some of their positions in index futures during
the week. In the options segment, 15300 call option of the weekly series has seen a good open interest build up, indicating
aggressive call writing at this strike, while 15000 put option has decent OI outstanding. In case the Nifty breaches Friday’s low of
14950, then we could see unwinding of positions by the put writers of weekly as well as monthly series. Looking at the above data,
we advise traders to stay light on positions and any pullback towards 15200-15300 if seen, should be used as a shorting opportunity.
On the flipside, a move below 14950 could drag the index towards its next support zone of 14800-14700.
Weekly change in OI
Short Formation
Chg (%)
ASHOKLEY 52452000 28.51 122.50 (3.43)
Long Formation
Chg (%)
MINDTREE 1583200 30.37 1881.65 8.57
For Private Circulation Only
Technical and Derivatives Review
| March 13, 2021
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]g.com
Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jai[email protected]com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]ng.com
Sneha Seth Derivatives Analyst [email protected]gelbroking.com