Technical and Derivatives Review | December 13, 2019
For Private Circulation Only
Smart recovery amid global cool off, all set for fresh highs
Sensex (41010) / Nifty (12087)
Source: Trading View
Future outlook
The week gone by started trading on a weaker note as the indices continued with its previous week’s corrective phase and the
broader markets too witnessed some sell-off in the initial couple of trading sessions. However, on Wednesday, the Nifty rallied
sharply in the last hour of the trade post forming a low of 11832. This reversal was then followed by consecutive gap up opening on
the last two sessions and the index rallied higher to end the week well above the 12000 mark.
Although we had seen a tepid start for the week, the Nifty again took support in the range of 11850-11800 and resumed its higher
degree uptrend. Based on the basic principle in bull market of ‘Buy on dips’, we were optimistic on the markets in the recent
corrective phase and this strategy has worked quite well since last few months. Now, if we look at the recent chart structure, Nifty
has managed to form a support base in the range of 11850-11800 twice in the recent past (i.e. in mid-November and in last week)
and hence, this range now becomes a sacrosanct for the near term trend. On the flipside, the broader markets too participated in
the rally in last couple of sessions and thus there is no second thought to the belief that the markets have resumed its uptrend.
Hence, we continue with our optimistic stance and advise traders to trade with a positive bias. As per the reciprocal retracement
theory, the probable target for Nifty in the near term is seen around 12250-12300, whereas the immediate supports are placed
around 11950 and 11850 levels.
During the week, the Metals, Auto and the Banking were the outperforming sectors which had seen up move in stocks with good
rise in volumes. These are likely to continue their momentum in the near term and hence, traders are advised to continue to ride the
trend and look for stocks within these sectors (along with selective pharma names too) from a trading perspective.
Technical and Derivatives Review | December 13, 2019
For Private Circulation Only
Fresh long formation hints extension of recent rally
Nifty spot closed at 11921.50 this week, against a close of 11921.50 last week. The Put-Call Ratio has increased from 1.25 to 1.63.
The annualized Cost of Carry is positive at 12.93%. The Open Interest of Nifty Futures has increased by 9.15%.
Derivatives View
Nifty current month future closed with a premium of 55.65 points against a premium of 34.20 points to its spot. Next month future
is trading with a premium of 103.80 points.
As far as Nifty options activities for the week are concerned, we saw fresh build-up in 11900-12000 call followed by 12100-12600
strikes. On the other side, 11900-12100 puts added huge positions. Maximum open interest for the monthly series now stands at
12000 for both call and put option.
We began the week on a slightly positive note but the benchmark index lacked buying interest and hence corrected towards 11800.
However, strong buying emerged from the support zone of 11800-11850 and we witnessed gap up opening for next two consecutive
session. On Friday, index opened above the hurdle of 12000 and follow-up buying led weekly closing slightly below 12100 mark. In
the correction seen from 12150-11800, we hardly saw any short formation and now in last three sessions recovery good amount of
fresh longs were formed in Nifty. The Nifty future premiums have also surged in recent rally, which is again a sign of strength.
Considering the above development, we would advise traders to use declines to add on fresh longs as we are soon heading to hit
fresh record highs.
Long Formation
Chg (%)
Chg (%)
NMDC 20964000 22.77 114.80 3.84
MANAPPURAM 17784000 14.31 173.60 9.35
TATAMOTORS 65053300 13.24 177.40 9.78
EXIDEIND 9853400 12.90 186.70 2.19
HINDALCO 33456500 12.88 209.30 5.49
Weekly change in OI
Short Formation
Chg (%)
Chg (%)
APOLLOHOSP 2330500 74.90 1361.75 (7.30)
UJJIVAN 9603400 27.57 328.65 (7.10)
YESBANK 257903800 12.83 44.65 (17.39)
APOLLOTYRE 9750000 8.08 167.55 (2.56)
BHARTIARTL 46439739 6.82 430.10 (3.69)
Technical and Derivatives Review | December 13, 2019
For Private Circulation Only
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.c[email protected]ngelbroking.com
Ruchit Jain Technical Analyst ruchi[email protected]broking.com
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com
Sneha Seth Derivatives Analyst sneha.set[email protected]lbroking.com