1
For Private Circulation Only
Technical and Derivatives Review
| May 16, 2020
Stimulus fails to excite, 9000 a key support to watch
Sensex (31098) / Nifty (9137)
Source: Trading View
Future outlook
It was clearly a week of consolidation despite PM Modi announcing a gargantuan stimulus package of 20 Lac crores. There was initial
reaction seen at the opening on Wednesday; but didn’t have enough strength to buck the global trend. We kept sliding gradually
throughout the remaining part of the week to eventually close with a cut of a percent as compared to the previous weekly close.
It was disappointing to see our markets failing at higher levels despite such a massive trigger. Hence, it is clear now, market participants are
focusing more on global developments and if market needs to see some uptick in the market, we must have some relief with respect to US-
China trade deal as well as the Coronavirus pandemic. Till then Nifty is likely to remain in the range of 9500-9000. In last couple of weeks,
we have seen bears respecting the key support of 9000 and every time we move closer to it, some buying tends to emerge. Hence, till the
time we are holding 9000, the bulls should remain hopeful; whereas on the other side, it would be important to see whether we break the
higher boundary or not.
At this juncture, the pragmatic approach would be to stay light within the range and should focus more on potential movers. Despite
market remaining in a range, we have seen good trading opportunities in few individual pockets.
2
For Private Circulation Only
Technical and Derivatives Review
| May 16, 2020
Long unwinding by stronger hands
Nifty spot closed at 9136.85 this week, against a close of 9251.50 last week. The Put-Call Ratio has decreased from 1.32 to 1.11. The
annualized Cost of Carry is positive at 0.08%. The Open Interest of Nifty Futures has increased by 1.37%.
Derivatives View
Nifty current month future closed with a premium of 0.25 points against a discount of 14.85 points to its spot. Next month future is
trading with a premium of 1.70 points.
As far as Nifty options activities for the week are concerned, we witnessed some open interest addition in 9300-9500 call options.
On the flipside, 8800-8600 put options saw some open interest additions as well. Maximum open interest for the May monthly
series now stands at 10000 call option and 9000 put option.
The indices witnessed some pullback move during the week post the announcement of the Covid relief package by the Prime
Minister. However, there was no follow up buying seen after a gap up opening on Wednesday and Nifty again corrected to end the
week with a loss of about seven-tenths of a percent. During the week, FII’s squared off their long positions in index futures segment
and formed some short positions as well. Due to this, their ‘Long Short Ratio’ now stands at 34 percent. The options data hints at a
continuation of the consolidation within the range of 9000-9500. Hence, traders are advised to trade with a stock specific approach
till the index trades within the range.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
ESCORTS
2758800
55.49
822.50
11.09
ZEEL
27956500
41.50
164.50
8.80
VEDL
113216500
25.23
93.15
20.43
INDIGO
3657200
24.05
982.85
6.40
MANAPPURAM
15636000
19.71
127.30
6.71
Weekly change in OI
(1,000)
2,500
6,000
9,500
Call Put
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
CUMMINSIND
1880100 98.20 339.10 (5.23)
HDFCBANK
38718600
31.57
883.50
(4.19)
BIOCON
17647900
31.4
5
329.45
(8.09)
NESTLEIND
379900
24.76
16462.90
(7.20)
CESC
676800
18.82
580.75
(6.26)
3
For Private Circulation Only
Technical and Derivatives Review
| May 16, 2020
Research Team Tel: 022 - 39357600 (Extn. 6844) Website: www.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