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Technical and Derivatives Review

| April 16, 2021

Market stabilized despite initial hiccup, not out of the woods yet

Sensex (48832) / Nifty (14618)

Source: Trading View

Future outlook

We had a pathetic start for the week on Monday as Nifty surprisingly opened with a massive cut of more than 200 points as

indicated by the SGX Nifty. This was mainly on the back of mounting concerns over the COVID-19 cases on the domestic front. Since

it weighed down heavily on the financial space, the knock turned out to be a brutal one. In this process, the Nifty went on to tumble

over 500 points to test the sub-14300 territory. Things looked extremely scary at the close on the opening day; but fortunately there

was no follow through seen to it. In fact, throughout the remaining part of the week, we managed to recover fair bit of ground to

trim major portion of losses.

Since last couple of weeks, market was trapped in a small range where it neither had strength to stay beyond 14900 nor it was

letting it slide below 14500. Due to Monday’s sharp selloff, Nifty breached this range in the downward direction and the major

culprit of this was clearly the entire financial basket. Although, Nifty didn’t violate major support of 14200, the BANKNIFTY finally

slipped below its cluster of support placed at 32400 – 32200. Hence, till the time we do not see banking index crossing 32500 –

33000 levels, we are certainly not out of the woods yet. As far as Nifty is concerned, 14700 – 14850 remains to be a sturdy wall and

surpassing it would really be a daunting task for the bulls. On the downside, 14500 – 14350 – 14250 are the levels to watch out for.

If we have to take out any positives from the week gone by, then it would certainly be an overall improvement in the market

breadth which remained strongly in favour of advances. Also there were few pockets like IT and Pharma did exceedingly well

towards the latter half. But we would like to highlight one point that the NIFTY MIDCAP50 index has confirmed a ‘Lower Top Lower

Bottom’ sequence on daily chart along with the breakdown from ‘Head and Shoulder’ pattern. Hence, identifying the apt theme and

the potential movers within the same would prove out to be the key aspect. In our sense, it’s better to stay light on positions and

avoid aggressive longs till the time few key levels are not reclaimed convincingly.

For Private Circulation Only

Technical and Derivatives Review

| April 16, 2021

14600-14700 remains a key hurdle

Nifty spot closed at 14617.85 this week, against a close of 14834.85 last week. The Put-Call Ratio has increased from 1.29 to 1.38.

The annualized Cost of Carry is positive at 5.35%. The Open Interest of Nifty Futures increased by 4.25%.

Derivatives View

Nifty current month future closed with a premium of 27.85 points against a premium of 58.15 points to its spot. Next month future

is trading at a premium of 75.95 points.

In options segment, the build-up was scattered between 14500-15200 call options. In put options, we hardly saw any relevant build-

up; however, decent unwinding was seen 14500-14900 strikes. Maximum build-up in the monthly series is now placed in 15000 call

and 14000 put options.

We started-off the week with the downside gap amidst partial lockdown due to the rising COVID cases in India. Post opening, we

witnessed a follow-up sell-off to drag index below 14250 mark. In the next three trading sessions, the benchmark index recovered to

almost reclaim 14700. Eventually, due to some profit booking in last half an hour of trade on Friday, we concluded the week one and

a half percent lower and slightly above 14600 mark. Throughout the week, except for some build-up on Friday; the overall open

interest activity in Nifty remained muted. In case of BankNifty, we saw some long unwinding on WOW basis. Stronger hand added

mixed positions; but, majority of them were on long side. Hence, the ‘Long Short Ratio’ has jumped up from 58% to 61%. At current

juncture, 14600-14700 levels remains the study hurdle and until we sustain above same one should avoid any bullish bets.

Weekly change in OI

Short Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

LALPATHLAB 4365000 85.11 821.40 (5.34)

MIND

TREE

1417500

34.11

1114.10

(10.93)

SRTRANSFIN

1991858

25.29

1149.00

(7.60)

EICHERMOT

11650000

17.14

224.50

(5.59)

BIOCON

21132000

15.27

209.20

(4.95)

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

WIPRO 347250 79.92 3149.70 15.67

CADILAHC

9234500

48.76

533.30

9.59

CIPLA

175650

30.06

31794.10

5.71

GLENMARK

11948200

17.66

517.35

16.17

DRREDDY

7488500

15.74

1086.05

5.25

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Technical and Derivatives Review

| April 16, 2021

Research Team Tel: 022 - 39357600 (Extn – 6844) Website: www.angelbroking.com

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For Derivative Queries E-mail: [email protected]

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Technical and Derivatives Team:

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

Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jain@angelbroking.com

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com

Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com