Technical Picks | January 16, 2016
Nifty nearing strong support of 7300
Sensex (24455) / Nifty (7438)
In the week gone by, our benchmark index (Nifty) breached
Exhibit 1: Nifty Weekly chart
the psychological support of 7500 on Monday but with some
recovery that followed, it managed a close above the 7550
mark. Tuesday’s session saw it correct by a further half a
percent. On Wednesday, the Nifty posted a new 52 week
low of
7425.80, but we then witnessed a tremendous
recovery from the lower levels, thereby leading the index to
end the session at the level of 7562. On Thursday, after a
gap down opening, the bulls tried to render some strength to
the market but couldn’t succeed. In each of the first four
trading sessions of the week, the Nifty breached the 7500
mark but somehow managed to close above the same.
However, on the concluding session of the week, the bears
tightened their strangle and in a show of dominance,
Source: Company, Angel Research
dragged the Nifty to close well below the 7500 mark. In the
process the Nifty posted the lowest weekly close in the last
Exhibit 2: Nifty Daily chart
nineteen months.
Pattern formation:
The
’89-day EMA’ and the
’89-week EMA’ for
the Sensex/Nifty are placed at 25994 / 7894 and
25918 / 7831 levels, respectively.
The
’20-day EMA’ and the
‘20-week EMA’ for
the Sensex/Nifty are placed at 25245 / 7682 and
25990 / 7892 levels, respectively.
Future outlook
The market saw a sharp correction in first complete trading
Source: Company, Angel Research
week of the new calendar year and the weakness spilled
We have often been highlighting the ‘Falling Channel’ in
over in the following week as well with the Nifty opening gap
which the index has been trading since the last 10 months
down by more than a percent on Monday. In the course of
and post the recent fall, the index is fast approaching the
action, the Nifty breached the September lows on Monday’s
lower end of the channel. The next strong support levels
session led by negative global cues. The breakdown was
stand at 7340 - 7300. This support coincides with the 161%
much on our expected lines as we had mentioned about the
Fibonacci retracement level of the recent up move from
same in our previous weekly report. Although the index
7551.05 to 7972.55. Hence, it would be advisable to cover
traded in the range of 7605 - 7425 during the week, the
short positions at the mentioned support zone and wait for
volatility within the range bewildered many of the market
further market developments. Any reversal pattern if formed
participants. The Nifty has ended the week at a 19-month
around the support could lead to an up move in the Nifty up
closing low and yet there are no signs of any reversal
to the resistance zone of 7600 - 7620.
patterns being seen on the charts.
For Private Circulation Only
1
Technical Picks | January 16, 2016
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
23,990
24,222
24,620
24,853
25,251
NIFTY
7,310
7,374
7,490
7,553
7,669
NIFTY BANK
14,503
14,855
15,506
15,857
16,508
ACC
1,172
1,201
1,252
1,281
1,332
ADANIPORTS
201
210
225
234
249
AMBUJACEM
188
191
195
198
202
ASIANPAINT
828
854
875
901
922
AXISBANK
334
354
389
409
443
BAJAJ-AUTO
2,266
2,294
2,341
2,369
2,416
BANKBARODA
115
120
130
136
146
BHEL
123
130
142
148
160
BPCL
837
885
916
964
995
BHARTIARTL
286
296
311
321
336
BOSCH
17,264
17,566
17,934
18,236
18,605
CAIRN
108
114
123
129
138
CIPLA
586
598
608
619
629
COALINDIA
306
312
317
323
328
DRREDDY
2,788
2,862
2,928
3,002
3,068
GAIL
307
321
348
363
389
GRASIM
3,319
3,412
3,531
3,623
3,743
HCLTECH
782
810
826
854
870
HDFC
1,021
1,031
1,048
1,058
1,075
HDFCBANK
1,125
1,137
1,156
1,168
1,186
HEROMOTOCO
2,340
2,384
2,454
2,498
2,569
HINDALCO
66
69
74
77
81
HINDUNILVR
745
775
806
836
868
ICICIBANK
208
216
230
238
252
IDEA
98
105
119
126
140
INDUSINDBK
884
903
924
943
963
INFY
978
1,059
1,112
1,192
1,245
ITC
304
309
315
320
325
KOTAKBANK
650
663
684
697
718
LT
1,036
1,072
1,136
1,172
1,236
LUPIN
1,598
1,650
1,687
1,739
1,776
M&M
1,120
1,148
1,181
1,210
1,243
MARUTI
4,020
4,147
4,243
4,370
4,466
NTPC
128
132
140
144
151
ONGC
210
215
221
226
232
POWERGRID
133
136
141
144
150
PNB
83
88
96
101
109
RELIANCE
979
1,026
1,058
1,105
1,137
SBIN
164
174
191
201
217
SUNPHARMA
765
776
790
801
816
TCS
2,164
2,213
2,298
2,347
2,432
TATAMOTORS
320
331
350
361
381
TATAPOWER
57
59
64
66
71
TATASTEEL
211
220
238
247
265
TECHM
479
500
515
536
551
ULTRACEMCO
2,489
2,553
2,646
2,710
2,803
VEDL
62
68
77
82
92
WIPRO
520
532
543
554
566
YESBANK
632
648
676
692
721
ZEEL
381
392
407
418
433
Technical Research Team
For Private Circulation Only
2
Derivatives Review | January 16, 2016
We don’t expect huge downside; but, stay light
Nifty spot closed at 7437.80 this week, against a close of 7601.35 last week. The Put-Call Ratio has remained unchanged at 0.82
levels and the annualized Cost of Carry is positive at 3.19%. The Open Interest of Nifty Futures increased by 9.42%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has remained unchanged at 0.82 levels as both
Implied Volatility (IV) for NIFTY has increased from 16.50%
call and put options added significant positions in last
to 18.31%. Historical volatility (HV) of NIFTY is at 17.74%
week. In call options, 7700 and 7600 strikes added huge
and that for BANKNIFTY is at 24.84%. Liquid counters
buildup; while, in put options 7300 and 7400 strikes added
having very high HV are WOCKPHARMA, IDBI, CANBK,
good amount of open interest. Maximum buildup in current
STAR and KTKBANK. Stocks where HV are on lower side
series is seen in 7700 call & 7300 put options.
are HINDZINC, ITC, COALINDIA, MARUTI and
SUNPHARMA.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 8.45
`2,21,979/- cr. to `2,44,942/- cr. Stock futures open
points against a premium of 3.85 points to its spot. Next
interest has decreased from `83,881/- cr. to `62,567/- cr.
month future is trading with premium of 28.55 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are ASIANPAINT,
week are ULTRACEMCO, ASIANPAINT, CAIRN, VEDL and
NTPC, GAIL, INFY and ITC. Stocks with negative CoC are
HINDUNILVR. On the other hand unwinding was visible in
PNB, WIPRO, ULTRACEMCO, BPCL and BHARTIARTL.
counters like GAIL, RELIANCE, MARUTI, M&M and NTPC.
Derivative Strategy
Scrip: HINDUNILVR
CMP : `804.25
Lot Size : 600
Exercise Date (F & O) :
28th Jan 2016
View: Volatile within range
Strategy: Short Strangle
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
SELL
600
HINDUNILVR
820
JAN
CE
12.00
750
(`7.00)
SELL
600
HINDUNILVR
780
JAN
PE
11.00
770
`13.00
LBEP - `757.00
790
`23.00
UBEP - `843.00
810
`23.00
Max. Risk: Unlimited
Max. Profit: `13,800
If HINDUNILVR continues to moves below LBEP or
If HINDUNILVR closes on or between `780 & `820
above UBEP.
on expiry.
830
`13.00
NOTE: Profit can be booked before expiry if HINDUNILVR remains in range and time value decays.
850
(`7.00)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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