Technical and Derivatives Review | November 17, 2017
Delightful reactions on Moody’s upgrade; don’t get carried away
Sensex (33343) / Nifty (10284)
Source: Trading View
Future outlook
This week, our market experienced a good roller-coaster ride and has provided trading opportunities for both counterparties. Clearly, bulls
had the last laugh as we saw a smart recovery in last couple of sessions to reclaim the 10300 mark; courtesy to Moody’s upgrade on India’s
sovereign rating for the first time in 14 years. The notable outperformer in this move was the entire banking pack as we saw Bank Nifty
outperforming by a fair margin and clocking record highs on Friday.
Now, here the confusion arises; because, both major indices, Nifty and Bank Nifty are clearly showing divergences. So, going forward, one
need to decide whether the outperforming banking index pushes the Nifty higher or the underperforming index (Nifty) becomes the culprit
in dragging its peer lower. Looking at few key technical evidences, our sense is Nifty would remain under pressure and we may see index
failing to extend this relief rally. However, in this course of action, it’s very difficult to gauge Bank Nifty’s movement. Hence, we would
rather closely observe key levels on both these indices in the forthcoming week.
As far as Nifty is concerned, 10344 - 10368 seems to be an immediate hurdle; whereas any move below 10250 would resume downward
move to test sub-10200 levels. We reiterate that traders should not take aggressive positions in the index and should rather keep focusing
on individual stocks with a proper exit strategy.
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Technical and Derivatives Review | November 17, 2017
FIIs Index Futures ‘Long Short Ratio’ at neutral point
Nifty spot closed at 10283.60 this week, against a close of 10321.75 last week. The Put-Call Ratio has decreased to 1.23 from 1.33 levels
and the annualized Cost of Carry is positive at 6.89%. The Open Interest of Nifty Futures decreased by 6.01%.
Derivatives View
Nifty current month future closed with a premium of 25.25 points against a premium of 12.25 points to its spot. Next month future is
trading with a premium of 62.25 points.
PCR-OI has decreased from 1.33 to 1.23 on week on week basis; due to build-up in call options and unwinding in put options. We saw open
interest addition in 10200, 10400 and 10500 call options. On the flip side, hardly any strike of put options added relevant positions.
However, decent amount of unwinding was witnessed in 10100 and 10200 put options. For November series, maximum open interest
concentration is placed at 10500 followed by 10400 call option and for put option stands at 10000 followed by 10200 strike.
We started last week on a negative note; however, due to recovery in last two trading sessions the index managed to close with marginal
loss. We witnessed FIIs unwinding decent amount of longs in index futures, along with good amount of short formation in stock futures. At
present, their index futures ‘Long Short Ratio’ declined to 50%, which indicates they have equal long and short positions in index futures.
Considering the above data points, we believe traders to remain light in index unless we see fresh positions forming in either direction.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
VOLTAS
3195000
31.86
611.95
6.71
INFRATEL
12240000
44.29
381.55
(10.48)
HDIL
39741000
31.18
64.25
6.02
MGL
1391400
38.28
1081.00
(4.60)
DLF
51710000
30.56
224.65
7.54
BATAINDIA
2513500
32.00
755.35
(5.64)
ICIL
13223000
20.55
128.25
9.06
NATIONALUM
36704000
26.04
81.80
(6.51)
PAGEIND
44300
18.45
23455.05
5.92
SREINFRA
13315000
14.39
100.10
(4.12)
TATAPOWER
39861000
14.18
89.50
7.51
MUTHOOTFIN
2332500
12.93
457.60
(5.64)
APOLLOHOSP
2641000
14.03
1050.65
5.37
IDBI
22046000
12.77
59.85
(6.34)
REPCOHOME
1015700
13.89
623.90
5.55
DCBBANK
6232500
12.69
179.55
(4.52)
Weekly change in OI
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Technical and Derivatives Review | November 17, 2017
Technical and Derivatives Team:
Sameet Chavan
Chief Analyst - Technical & Derivatives
[email protected]
Ruchit Jain
Technical Analyst
[email protected]
Rajesh Bhosale
Technical Analyst
[email protected]
Sneha Seth
Derivatives Analyst
[email protected]
Research Team Tel: 022 - 39357600
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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