Technical Picks | May 14, 2016
Market undecided on direction
Sensex (25490) / Nifty (7815)
The week began on a cheerful note on Monday with the
Exhibit 1: Nifty Weekly chart
market citing positive cues from its global peers. The
momentum accelerated as the day progressed and the rally
resulted in the Nifty posting a gain of ~2% over its previous
close. Subsequently, the index traded broadly undecided in
the following sessions and oscillated within a small range of
7916 to 7780 until Friday which is when it underwent a
noteworthy correction as cautious traders chose to lighten up
long positions. Still, on a week-on-week basis the Nifty
added 1.05%, concluding a tad above the 7800 mark.
Key Moving Averages:
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
25174
/
7677 and
Source: Company, Angel Research
25580 / 7750 levels, respectively.
Exhibit 2: Nifty Daily chart
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
25488
/
7807 and
25237 / 7691 levels, respectively.
Future outlook
The concluded week was an eventful one for our market
mainly because of the corrective announcement by the
government over the long standing ‘Mauritius Treaty’ and
the ‘P-Notes’ issue. The announcement spooked market
participants as it’s a sensitive issue which could potentially
influence the quantum of FII money flow into the market.
Next was the announcement pertaining to tightening of KYC
norms which triggered a decent amount of correction on
Source: Company, Angel Research
Friday. The first half of the week gone by was very much on
our expected lines. The Nifty did manage to rebound sharply
On the downside, a strong support stands at 7678, which
after finding support a tad above the mentioned support
coincides with multiple technical evidences such as the
level of 7650. However, due to a lot of negative news flow,
‘Downward Sloping Trend Line’ and the daily ’89 EMA’.
the Nifty corrected a bit after posting a weekly high of
Aggressive positions in either direction should only be
7916.05. On scrutinising this entire price development, we
created once the Nifty manages to confirm a breakout from
realise that the Nifty is clearly lacking direction and is
the range of 8000 - 7650. Within this range, 7920 would
swaying on both sides within a range. It seems that the bulls
be seen as an immediate resistance, whereas 7780 would
are now finding it increasingly difficult to overcome the 8000
act as an important support level for the index.
mark and thus it wouldn’t be wise to pre-empt any move.
For Private Circulation Only
1
Technical Picks | May 14, 2016
Wekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
25,490
25,016
25,253
25,540
25,777
NIFTY
7,815
7,666
7,740
7,828
7,903
NIFTY BANK
16,717
16,074
16,395
16,679
17,000
ACC
1,457
1,403
1,430
1,453
1,480
ADANIPORTS
189
169
179
189
199
AMBUJACEM
217
213
215
219
221
ASIANPAINT
944
866
905
926
965
AUROPHARMA
784
753
769
796
811
AXISBANK
491
441
466
486
511
BAJAJ-AUTO
2,518
2,375
2,447
2,502
2,573
BANKBARODA
155
146
151
155
160
BHEL
123
117
120
125
128
BPCL
928
887
908
929
949
BHARTIARTL
355
337
346
362
371
INFRATEL
375
357
366
373
382
BOSCH
20,676
18,237
19,457
20,271
21,490
CIPLA
532
522
527
535
539
COALINDIA
281
272
277
282
287
DRREDDY
2,917
2,743
2,830
2,909
2,996
EICHERMOT
18993
17171
18082
19291
20202
GAIL
380
364
372
383
391
GRASIM
4,252
3,997
4,125
4,212
4,339
HCLTECH
723
694
709
721
735
HDFCBANK
1,141
1,104
1,123
1,137
1,156
HDFC
1,166
1,119
1,143
1,182
1,205
HEROMOTOCO
2,913
2,827
2,870
2,925
2,968
HINDALCO
89
86
87
91
93
HINDUNILVR
832
793
813
841
860
ICICIBANK
227
212
219
226
233
IDEA
114
106
110
114
117
INDUSINDBK
1,065
1,022
1,044
1,058
1,079
INFY
1,207
1,165
1,186
1,202
1,222
ITC
319
309
314
320
325
KOTAKBANK
708
677
693
718
734
LT
1,287
1,220
1,253
1,297
1,330
LUPIN
1,589
1,560
1,575
1,599
1,613
M&M
1,313
1,265
1,289
1,326
1,350
MARUTI
3,846
3,729
3,788
3,849
3,907
NTPC
141
136
139
142
144
ONGC
204
196
200
206
210
POWERGRID
145
137
141
143
147
RELIANCE
978
957
967
981
992
SBIN
185
180
183
186
189
SUNPHARMA
795
780
787
800
807
TCS
2,523
2,403
2,463
2,517
2,577
TATAMTRDVR
277
260
269
280
288
TATAMOTORS
390
361
376
390
405
TATAPOWER
70
67
69
71
73
TATASTEEL
323
308
315
326
334
TECHM
480
465
472
479
486
ULTRACEMCO
3,152
3,029
3,090
3,162
3,223
WIPRO
540
526
533
538
545
YESBANK
951
890
920
944
974
ZEEL
449
384
417
435
468
Technical Research Team
For Private Circulation Only
2
Derivatives Review | May 14, 2016
Subdued FIIs activity indicating range bound movement
Nifty spot closed at 7814.90 this week, against a close of 7733.45 last week. The Put-Call Ratio has increased from 0.79 to 0.88
levels and the annualized Cost of Carry is positive at 4.57%. The Open Interest of Nifty Futures decreased by 4.26%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.79 to 0.88 levels, mainly due
Implied Volatility (IV) for NIFTY has decreased from
to OI addition in put options. Last week, we witnessed good
15.05% to 15.02%. Historical volatility (HV) of NIFTY is at
build-up in 8000 - 8200 call options; we believe it is more
18.63% and that for BANKNIFTY is at 24.42%. Liquid
of writing which took place. While in put options, 7800
counters having very high HV are ABIRLANUVO, ZEEL,
added huge positions, followed by some addition in 7900
PFC, DRREDDY and IRB. Stocks where HV are on lower
strike. Maximum OI in current series is visible in 8000 call
side are TVSMOTOR, IDEA, JUBLFOOD, M&MFIN and
and 7800 put options.
NHPC.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 15.65
`2,06,457/- cr. to `2,28,607/- cr. Stock futures open
points against a premium of 26.80 points to its spot. Next
interest has increased from `58,292/- cr. to `60,400/- cr.
month future is trading with premium of 28.00 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are TATAPOWER, ZEEL,
week are EICHERMOT, ZEEL, HINDUNILVR, TATAMTRDVR
AUROPHARMA, LUPIN and KOTAKBANK. Stocks with
and DRREDDY. On the other hand unwinding was visible in
negative CoC are IDEA, BHARTIARTL, HEROMOTOCO,
counters like INDUSINDBK, ACC, COALINDIA, ICICIBANK
GAIL and SBIN.
and TCS.
Derivative Strategy
Scrip: LT
CMP : ` 1290.55/-
Lot Size : 300
Exercise Date (F & O) :
26th May 2016
View : Range bound
Strategy: Short Strangle
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
SELL
300
LT
1320
MAY
CE
16.00
1180
(`48.00)
SELL
300
LT
1260
MAY
PE
16.00
1230
`2.00
UBEP - ` 1352.00/-
LBEP - ` 1228.00/-
1270
`32.00
Max. Risk: Unlimited/-
Max. Profit:
`9600
1320
`32.00
If LT continues to move above UBEP or below LBEP. If LT closes between strike prices on expiry.
1370
(`18.00)
NOTE: Profit can be booked before expiry if LT remains range bound and premium falls.
1420
(`68.00)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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