February 14, 2015
Technical Picks |
Market seems directionless - concentrate on individual stocks
Sensex (29095) / Nifty (8806)
Trading for the week began on Monday with the market opening
Exhibit 1: Nifty Weekly chart
with a downside gap of a percent. Subsequently, the Nifty
consolidated for a major part of the remaining session before
resuming its morning downtrend to shed another half a percent
from the opening point, in the concluding part of the session.
This was followed by yet another gap down opening on Tuesday.
The market witnessed massive volatility throughout the
remaining session with the Nifty trading within a broad range
of nearly 180 points during the session. The remaining three
sessions of the week traded with a positive bias and hence, the
Nifty eventually managed to close almost at the highest point
Source: Falcon
of the week. Healthcare stocks became the top gainers in the
Exhibit 2: Nifty Daily chart
concluded week; among the other gaining sectors were FMCG,
Auto and Banking; whereas the Oil & Gas and Realty counters
remained a bit subdued during the entire week. The Nifty
managed to recover its previous week's losses and ended the
concluded week with a gain of 1.67% over the previous week's
closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27763 / 8360 and 24241 / 7267 levels, respectively.
Source: Falcon
The '20-day EMA' and the '20-week EMA' are placed at
v-shaped recovery twice from the lows of 8470 during the day
28625 / 8659 and 27815 / 8374 levels, respectively.
to close in the positive territory. The earlier important support
Future outlook
of 8650 was seen as a strong resistance but the market had no
After witnessing a gradual slide in the previous week, the Nifty
respect for this level as the Nifty effortlessly surpassed this level
opened the week with a downside gap and kick started the
on Thursday and extended its up move on Friday to regain the
trading well below the crucial support level of 8650. With
8800 mark. Despite this strong momentum in the market,
reference to the 'Gap Theory', a breach of an important support
looking at last week's movement, we conclude that the market
with a gap is a sign of concern for the bulls. As a result, we
is directionless in the near term. We believe that the market is
witnessed a complete nosedive on Monday with the Nifty testing
stuck in a broad range of 8900 - 8950 on the higher side and
our initial target of 8500. A similar weakness was seen on
8650 - 8600 on the lower side, which can act as a strong
Tuesday too; but it proved out to be a complete nightmare for
support. Hence, we would focus more on stock specific
the intraday traders as the Nifty oscillated within a broad
movements in the coming week. It's advisable for traders
intraday range of 180 points. However, in the end, it were the
to trade with an appropriate exit strategy and avoid taking
bulls who pronounced their dominance as the Nifty gave a
undue risk.
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February 14, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,655
28,375
28,765
29,485
29,875
NIFTY
8,348
8,577
8,699
8,928
9,051
BANKNIFTY
17,798
18,584
19,013
19,798
20,227
ACC
1,426
1,511
1,574
1,659
1,722
AMBUJACEM
235
247
257
269
279
ASIANPAINT
753
788
819
855
886
AXISBANK
521
550
569
598
618
BAJAJ-AUTO
2,138
2,200
2,257
2,320
2,377
BANKBARODA
165
173
179
187
193
BHEL
244
256
263
274
281
BPCL
665
685
710
730
754
BHARTIARTL
338
345
355
363
373
CAIRN
240
248
255
262
269
CIPLA
584
622
662
701
740
COALINDIA
347
358
369
380
391
DLF
141
150
157
166
174
DRREDDY
2,874
3,102
3,236
3,464
3,598
GAIL
376
400
414
437
452
GRASIM
3,524
3,676
3,804
3,955
4,083
HCLTECH
1,883
1,934
1,972
2,022
2,060
HDFCBANK
1,011
1,043
1,063
1,095
1,115
HDFC
1,199
1,226
1,260
1,287
1,320
HEROMOTOCO
2,611
2,709
2,789
2,887
2,966
HINDALCO
141
147
151
157
162
HINDUNILVR
866
877
896
907
926
ICICIBANK
304
322
334
351
363
IDFC
157
165
170
177
182
INDUSINDBK
792
831
854
893
916
INFY
2,153
2,232
2,279
2,359
2,406
ITC
357
364
371
378
386
JINDALSTEL
130
138
147
155
163
KOTAKBANK
1,199
1,248
1,285
1,334
1,372
LT
1,477
1,563
1,619
1,705
1,761
LUPIN
1,465
1,541
1,617
1,693
1,769
M&M
1,048
1,091
1,145
1,188
1,242
MARUTI
3,246
3,399
3,513
3,666
3,780
NMDC
136
138
140
143
145
NTPC
134
138
141
145
148
ONGC
327
337
348
358
369
POWERGRID
135
143
148
155
160
PNB
159
163
168
171
176
RELIANCE
838
873
897
933
957
SSLT
192
202
209
220
226
SBIN
257
271
289
303
322
SUNPHARMA
888
906
929
947
970
TCS
2,352
2,407
2,488
2,543
2,624
TATAMOTORS
528
545
558
575
588
TATAPOWER
75
80
82
86
89
TATASTEEL
334
350
361
376
388
TECHM
2,686
2,798
2,860
2,972
3,034
ULTRACEMCO
2,837
2,936
3,040
3,140
3,244
WIPRO
617
632
648
663
679
ZEEL
331
346
356
372
382
Technical Research Team
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February 14, 2015
Derivatives Review |
8950-9000 is a strong resistance zone
Nifty spot closed at 8805.50 this week against a close of 8661.05 last week. The Put-Call Ratio has increased from 0.87 to 0.98 levels
and the annualized Cost of Carry is positive at 11.49%. The Open Interest of Nifty Futures increased by 5.42%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.87 to 0.98 levels. Last week we
Implied Volatility (IV) for NIFTY has decreased from 18.33%.to
hardly saw any buildup in both call & put options. Huge amount
14.96%. Historical volatility (HV) of NIFTY is at 17.92% and
unwinding was visible in 8200-8800 put options and in 8700
that for BANKNIFTY is trading at 28.23%. Liquid counters having
call options in last trading session. Maximum buildup in current
very high HV are HDIL, INDIACEM, UNITECH, JPASSOCIAT
series is seen in 9000 call & 8500 put options. We believe
and IBREALEST. Stocks where HV are on lower side are BAJAJ-
market will remain in this range so trade accordingly.
AUTO, HEROMOTOCO, INDUSINDBK, DIVISLAB and NMDC.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 36.05 points
`2,17,522/- cr. to `2,40,738/- cr. Stock futures open interest
against the premium of 63.75 points to its spot. Next month
has increased from `69,644/- cr. to `73.788/- cr. Liquid
future is trading with premium of 91.60 points. Liquid counters
counters names which added significant positions last week
where CoC is high are UNITECH, JSWSTEEL, JISLJALEQS,
are M&M, BPCL, SBIN, TCS and ULTRACEMCO. On the other
ANDHRABANK and HDFCBANK. Stocks with negative CoC are
hand unwinding was visible in counters like DRREDDY,
NMDC, SAIL, BHEL, RECLTD and HEXAWARE.
COALINDIA, INDUSINDBK, BANKBARODA and ASIANPAINT.
Derivative Strategy
Scrip : ONGC
CMP : `341.40
Lot Size : 500
Exercise Date (F & O) :
26th. Feb 2015
View: Mildly Bullish
Strategy: Ratio Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
500
ONGC
350
FEB
CE
5.00
335
0.00
SELL
1000
ONGC
360
FEB
CE
2.50
343
0.00
BEP
-
`370/-
351
`1.00
Max. Risk: Unlimited
Max. Profit: `5,000/-
359
`9.00
If ONGC continues to above UBEP
If ONGC closes at 360 levels on expiry.
367
`3.00
375
(`5.00)
NOTE: Profit can be booked before expiry if ONGC moves in favorable direction and time value decays.
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Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
Ratings (Returns) :
Reduce (-5% to -15%)
Sell (< -15%)
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