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Technical and Derivatives Review | January 17, 2020
Index consolidates but dream run continues for broader market
Sensex (41945) / Nifty (12352)
Source: Trading View
Future outlook
It’s been a week of consolidation for our markets as we saw Nifty gyrating in a slender range of merely 100 points. However the overall bias
remained positive despite some small intraday hiccups. The stage was set on Monday itself when we clocked fresh record highs well above
the 12300 mark on a closing basis. Eventually, the muted week for benchmark index ended with gains over seven tenths of percent.
If we just have a glance at the Nifty’s price action for the entire week, it does not portray the real picture. Because although, the index did
nothing, there were bundle of stocks from the broader market that did exceedingly well and kept the street buzzing throughout the week.
The only disappointing factor was the underperformance of the banking space as it became the real culprit for Nifty remaining in this tight
range. Nevertheless, we still remain upbeat and expect the index to slowly-steadily head towards next millstones of 12400 – 12500. The apt
strategy to trade in such behaviour would be to play the range i.e. buy as close as possible to supports and vice versa. As far as support
levels are concerned, 12278 – 12220 becomes a key zone for the index.
We have been quite vocal about the midcap index since last few weeks and looking at this week’s stellar run, the recent anticipation finally
turned into a reality. Yes, it’s hastening towards a strong hurdle now and since a bit overbought, we may see in between some profit
booking in coming days. But mind you, by no means it would be trend reversal as we expect the midcap basket to unfold further legs of the
rally in coming weeks. Apart from this, the notable mover on Friday was the entire ‘Pharmaceutical’ basket, which has broken above major
barrier of ‘200-SMA’ on daily chart. Do watch out for this space as we expect some good traction in this underperforming sector.
For Private Circulation Only
Technical and Derivatives Review | January 17, 2020
No relevant change in F&O data, stay long
Nifty spot closed at 12352.35 this week, against a close of 12256.80 last week. The Put-Call Ratio has increased from 1.55 to 1.46.
The annualized Cost of Carry is positive at 7.34%. The Open Interest of Nifty Futures has increased by 3.02%.
Derivatives View
Nifty current month future closed with a premium of 32.30 points against a premium of 33.20 points to its spot. Next month future
is trading with a premium of 70.85 points.
As far as Nifty options activities for the week are concerned, we saw fresh build-up in 12200-12300 put options. On the other side,
some build-up was seen in 12500 and 12700 calls. Maximum open interest for the monthly series now stands at 12000 put and
12500 call option.
Post decent recovery in the penultimate week, we saw the benchmark index trading in a narrow range for the entire last week. It
was observed that 12250-12300 acted as a good demand zone for the week. Eventually, we conclude the week of consolidation with
the gains of 0.77%. In F&O space, we witnessed a decent amount of long formation in Nifty futures in the recent upmove and these
positions are still intact. For the banking index, we haven’t seen any relevant build-up from quite some time; it continued its
underperformance and the open interest too plunged by 10% WoW. In options front, put writers continued adding positions in
12300-12400 strikes. At the same time, fresh longs were formed in 12400-12650 call options on Friday. At present, 12250-12300 is
immediate support for the index and any dips around these levels shall be an opportunity to add fresh longs for the target of
Long Formation
Chg (%)
Chg (%)
TORNTPHARM 387000 60.91 2016.20 5.88
TATAGLOBAL 12673800 39.00 382.00 11.70
COLPAL 3430700 29.69 1517.05 3.50
MINDTREE 1695200 25.01 884.65 6.58
BALKRISIND 2196000 23.15 1105.10 6.60
Weekly change in OI
Short Formation
Chg (%)
Chg (%)
INDUSINDBK 17051200 51.27 1357.20 (9.21)
SBIN 123102000 21.35 319.50 (4.03)
IOC 42952000 16.20 122.45 (2.43)
RECLTD 21618000 15.04 141.30 (1.19)
IBULHSGFIN 24098400 13.79 304.80 (2.54)
For Private Circulation Only
Technical and Derivatives Review | January 17, 2020
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.c[email protected]ngelbroking.com
Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]gelbroking.com
Sneha Seth Derivatives Analyst sneha.s[email protected]ngelbroking.com