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Technical and Derivatives Review
| November 13, 2020
Bulls delighted ahead of Diwali, hope to have fabulous SAMVAT
Sensex (43443) / Nifty (12720)
Source: Trading View
Future outlook
Year 2020 has not been great for mankind as we had to make a lot of forceful changes in our lives. The pandemic weighed down
heavily on health as well as on economies across the world. But it seems that slowly and steadily things are coming back to normal.
In fact, a lot of positivity across the globe lifted markets at fresh record highs. This week, the first three trading sessions were almost
a replica of each other to register a new high of 12769.75. This was followed by some consolidation ahead of the Muhurat trading
session to conclude above the 12700 mark by adding nearly four percent on a weekly basis.
Last week, we had witnessed a ‘Bullish Flag’ breakout around 12050 and since then markets never looked back. With its marathon
rally in merely eight days, markets are very much in a commanding position. All’s well that ends well and hence, from hereon we can
see a brighter picture till the next SAMVAT. Looking at the daily chart, we can observe a couple of encouraging developments on
charts. The ‘RSI-Smoothened’ is moving northwards after entering the bullish territory above 70 and adding to this, the ‘ADX (14)’ is
becoming stronger as we can see its value rising well above the 25 mark. Generally, when we see these conditions together, it
provides impetus to the rally. Hence, any dip towards 12600 12450 should be used as a buying opportunity. On the upside, the
next milestone of 13000 is likely to be achieved very soon; in fact, we do not rule out the possibility of reaching 13100 – 13200 in the
forthcoming week itself.
Traders are advised not to expect any meaningful correction in the near future and hence, do not venture into taking contradictory
bets in such strong Bull Run. We are sounding extremely optimistic because almost all major sectors are contributing to this surge
and hence, can be considered a robust one. The broader market has also started to give some mesmerizing moves and mind you,
this is just a beginning of the mega Bull Run. So fasten your seat belts and gear up to take off post Diwali as well.
We take this opportunity to wish you all a Happy as well as Healthy Diwali and a prosperous New Year.
For Pri
vate Circulation Only
Technical and Derivatives Review
| November 13, 2020
Stronger hands continue their buying streak in a big way
Nifty spot closed at 12720 this week, against a close of 12263.55 last week. The Put-Call Ratio has decreased from 1.77 to 1.53. The
annualized Cost of Carry is positive at 7.38%. The Open Interest of Nifty Futures has increased by 9.91%.
Derivatives View
Nifty current month future closed with a premium of 33.45 points against the discount of 2.10 points to its spot. Next month future
is trading at a premium of 50.95 points.
It was yet another week of strong rally, wherein index inched higher to hit new life time highs. Except for Thursday, Nifty concluded
each session higher to the previous close and after some hiccups on Friday, we concluded the week at highest point ever. In recent
upmove, Nifty added long positions in Nifty; while, short covering took place in banking index. Stronger hands continued their
buying streak in equities and index futures. We are just in the mid of the series and FIIs buying in cash has doubled to that of last
series. On Friday, we witnessed massive writing in 12600 puts; which may now act as a demand zone. On the other side, build-up
was scattered between 12700-13500 call options. Considering the above data points, we don’t see any sign of caution. Thus, until
we don’t see any relevant unwinding in Nifty futures traders should prefer buy on dips strategy.
Weekly change in OI
Short Formation
Chg (%)
MUTHOOTFIN 4452750 60.85 1193.10 (5.28)
TORNTPOWER 2421000 38.18 304.40 (5.58)
MFSL 2645500 25.08 608.60 (2.46)
MARUTI 3512500 23.90 6838.45 (1.39)
DABUR 13963750 18.46 517.60 (1.58)
Long Formation
Chg (%)
ICICIGI 465800 183.94 1302.80 3.02
CUMMINSIND 1858800 35.64 478.40 4.67
EXIDEIND 14544000 34.00 169.20 2.73
JUBLFOOD 2112500 26.50 2494.85 10.21
PAGEIND 114420 24.76 21851.70 1.09
For Pri
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Technical and Derivatives Review
| November 13, 2020
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]ng.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