October 17, 2015
Technical Picks |
Nifty at higher end of the range - breakout may lead to extended rally
Sensex (27215) / Nifty (8238)
In the week gone by, the Nifty started off trading on Monday
Exhibit 1: Nifty Weekly chart
with marginal gains. But the index sold off all its opening gains
and formed a 'Bearish Engulfing' pattern later in the session.
However, inspite of the bearish pattern at the start of the week,
there was no follow up selling thereafter and the Nifty then
traded in a narrow range until Thursday. On Friday, the market
witnessed positive momentum during the latter part of session,
thus leading the Nifty to end the week with a marginal gain of
0.59% over the previous week's closing. On the sectoral front,
the gains were led by the Media, Auto, PSU Bank and the Metal
Source: Falcon
counters; whereas, IT stocks ended the week with losses.
Exhibit 2: Nifty Daily chart
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
26911 / 8157 and 25970 / 7833 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
26604 / 8066 and 26970 / 7833 levels, respectively.
Future outlook
For most part of the concluded week, the Nifty was largely
confined within the range of 8250 - 8050. A strong surge in
Source: Falcon
the penultimate hour of Friday's session surprised most of the
support may apply brakes on the ongoing optimism. In the
participants and the Nifty resultantly managed to close the week
concluded week, we witnessed a lot of stock specific action on
a tad below the 8250 mark, which is the highest point in the
the back of announcement of 2QFY2016 corporate results as
last two months.
well as on stock specific news flow. We expect individual stocks
Going forward, considering a strong weekly close, if the Nifty
to perform well in the coming week as well, and we therefore
manages to sustain above 8250 for an hour on the coming
recommend traders to follow a stock specific strategy with proper
Monday then we may witness an extension of this up move
exits in place.
towards 8350 - 8400 levels. On the lower side, 8050 has
become a major support for the Nifty. Only a move below this
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October 17, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
26,486
26,850
27,078
27,442
27,669
NIFTY
8,033
8,136
8,191
8,294
8,349
BANKNIFTY
17,251
17,582
17,765
18,096
18,279
ACC
1,319
1,356
1,378
1,416
1,437
AMBUJACEM
205
209
212
215
218
ASIANPAINT
832
857
871
896
910
AXISBANK
477
491
499
513
522
BAJAJ-AUTO
2,370
2,416
2,452
2,498
2,534
BANKBARODA
165
171
176
182
187
BHEL
197
205
210
218
222
BPCL
813
862
888
938
964
BHARTIARTL
336
343
348
355
360
BOSCH LIMITED
20,569
20,818
21,084
21,333
21,599
CAIRN
148
154
163
169
179
CIPLA
645
662
677
695
710
COALINDIA
326
332
338
344
350
DRREDDY
4,107
4,186
4,235
4,314
4,362
GAIL
301
313
320
332
339
GRASIM
3,577
3,613
3,651
3,687
3,724
HCLTECH
806
824
842
860
878
HDFCBANK
1,055
1,078
1,090
1,112
1,124
HDFC
1,243
1,277
1,296
1,331
1,350
HEROMOTOCO
2,454
2,519
2,558
2,623
2,661
HINDALCO
76
82
87
93
98
HINDUNILVR
739
762
792
815
846
ICICIBANK
277
284
288
295
299
IDEA
141
146
152
157
164
INDUSINDBK
926
944
955
974
985
INFY
993
1,044
1,126
1,177
1,260
ITC
333
341
347
355
360
KOTAKBANK
634
646
658
671
683
LT
1,506
1,555
1,582
1,632
1,659
LUPIN
1,946
2,001
2,056
2,111
2,167
M&M
1,242
1,265
1,283
1,307
1,325
MARUTI
4,131
4,291
4,376
4,535
4,620
NMDC
101
103
105
107
109
NTPC
122
125
127
129
131
ONGC
246
255
261
270
277
POWERGRID
130
133
134
137
138
PNB
133
136
138
140
142
RELIANCE
871
892
903
924
935
SBIN
235
245
251
261
267
SUNPHARMA
852
871
893
912
934
TCS
2,338
2,406
2,533
2,601
2,728
TATAMOTORS
336
361
376
401
416
TATAPOWER
61
65
68
73
76
TATASTEEL
234
243
253
262
271
TECHM
522
534
552
564
582
ULTRACEMCO
2,751
2,853
2,914
3,016
3,077
VEDANTA
98
103
111
116
124
WIPRO
547
562
581
596
615
YESBANK
702
738
756
792
810
ZEEL
364
394
410
440
456
Technical Research Team
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October 17, 2015
Derivatives Review |
Buy 8200 put option as an hedge
Nifty spot closed at 8238.15 this week against a close of 8189.70 last week. The Put-Call Ratio has remained unchanged at 1.02
levels and the annualized Cost of Carry is positive at 7.26%. The Open Interest of Nifty Futures increased by 9.72%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI remained unchanged at 1.02 levels. In call we saw
Implied Volatility (IV) for NIFTY has decreased from 16.35% to
build-up in 8200-8400 call options, while in put options 8000
12.84%. Historical volatility (HV) of NIFTY is at 20.61% and
and 8200 strikes added decent build-up. Unwinding was visible
that for BANKNIFTY is trading at 28.28%. Liquid counters having
in 8000-8100 call and 7700 & 7900 put options. Maximum
very high HV are ZEEL, IFCI, ADANIENT, TCS and
buildup in current series is seen in 8300 call & 8000 put options.
ADANIPOWER. Stocks where HV are on lower side are
Last week IV's plunged nearly 800 bps and is low too, we expect
AMTEKAUTO, APOLLOHOSP, KTKBANK, IBREALEST and
IV's to rise from current levels.
JUBLFOOD.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 21.30 points
`2,15,556/- cr. to `2,31,143/- cr. Stock futures open interest
against a premium of 15.65 points to its spot. Next month
has increased from `59,100/- cr. to `61,651/- cr. Liquid
future is trading with premium of 59.95 points. Liquid counters
counters names which added significant positions last week
where CoC is high are IDFC, AMBUJACEM, BANKBARODA,
are TCS, HINDUNILVR, ZEEL, AMBUJACEM and
PNB and KOTAKBANK. Stocks with negative CoC are NMDC,
HEROMOTOCO. On the other hand unwinding was visible in
HINDUNILVR, TATAMOTORS, ASIANPAINT and HCLTECH.
counters like ACC, MARUTI, LUPIN, INDUSINDBK and VEDL.
Derivative Strategy
Scrip : NIFTY
CMP : `8238.15
Lot Size : 25
Exercise Date (F & O) :
29th. Oct 2015
View: Mildly Bearish
Strategy: Long Put
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(Rs)
(Rs)
Profit/Loss
BUY
25
NIFTY
8200
OCT
PE
45.00
7800
`355.00
BEP
-
`8155/-
7900
`255.00
8000
`155.00
Max. Risk: `1,125/-
Max. Profit: Unlimited
If NIFTY continues to move above BEP.
If NIFTY closes below BEP on expiry.
8100
`55.00
8200
(`45.00)
NOTE: Profit can be booked before expiry if NIFTY moves in favorable direction and time value decays.
8300
(`45.00)
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