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

Scrip

Futures

Chg (%)

Price

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

Scrip

Futures

Chg (%)

Price

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

Research Team Tel: 022 - 39357600 Website: www.angelbroking.com

For Technical Queries E-mail: technicalresearch-cso@angelbroking.com

For Derivatives Queries E-mail: derivatives.desk@angelbroking.com

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Technical and Derivatives Team:

Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com

Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com

Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com