July 18, 2015
Technical Picks |
Supports shifting higher
Sensex (28463) / Nifty (8610)
After having witnessed a fair amount of volatility earlier, our
Exhibit 1: Nifty Weekly chart
market started the proceedings for the week on an optimistic
note on Monday, citing positive global cues. Subsequently, the
Nifty consolidated for the next couple of hours, but post the
midsession it shot up, which resulted in it closing well above
the 8400 mark. Then, a flat session on Tuesday was followed
by two strong sessions. In the process, the Nifty managed to
surpass the psychological hurdle of 8600 with ease. Despite a
subdued session on Friday, the Nifty managed to give a weekly
close a tad above the 8600 mark. All the sectoral indices traded
Source: Falcon
with a positive bias during the week, amongst which the
Exhibit 2: Nifty Daily chart
Healthcare, Consumer Durables, Oil & Gas and Banking
counters were the major contributors in the concluded week's
rally. The Nifty ended the week with decent gains of 2.98%
over the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27711 / 8381 and 25670 / 7726 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
27825 / 8426 and 27768 / 8394 levels, respectively.
Source: Falcon
the bulls have a stiff hurdle of 8635 - 8670 on the Nifty to
Future outlook
overcome. It needs to be crossed mightily for continuation of
Once again, our markets have shown reluctance to move lower
the uptrend towards 8750 - 8830. A failure to cross the above
as disappointing Index of Industrial Production (IIP) numbers
mentioned resistance zone by the bulls could lead to a range
released on the previous week end were completely shrugged
bound movement within the boundaries of the 'Rising Wedge'
off in the Monday's price action. As mentioned in our previous
pattern. The lower end of the pattern is seen around 8530
report, the 'Higher Top Higher Bottom' formation on the daily
(recent gap area) - 8500 levels. It should be noted that the
chart along with the positive crossover in the weekly
support levels for the Nifty are getting shifted upwards, which
'RSI-Smoothened' momentum oscillator provided strength to our
is a sign of strength. Firstly, it shifted from 8195 to 8315 and
market. However, post the recent rally, the Nifty is now trading
now from 8315 to 8500. A breach of this 'Rising Wedge' pattern
near the resistance zone of 8635 - 8670, which is the 127%
would apply immediate brakes on the ongoing uptrend. Traders
reciprocal retracement of the previous corrective move from
are now advised to keep booking profits on rallies and follow
8490 to 7940 and 61.8% retracement of the entire corrective
strict stop losses for existing trades. However, we still believe
move from 9119 to 7940. In addition, if we meticulously observe
that there is continued scope for stock specific action in the
the daily chart, it can be seen that the Nifty is trading in a tiny
market.
'Rising Wedge' pattern. The higher end of the pattern coincides
with the above mentioned resistance zone. Thus, next week,
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July 18, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,284
27,873
28,225
28,815
29,166
NIFTY
8,249
8,429
8,536
8,717
8,824
BANKNIFTY
18,422
18,759
18,994
19,330
19,565
ACC
1,439
1,463
1,487
1,510
1,534
AMBUJACEM
233
242
250
258
266
ASIANPAINT
777
801
828
852
879
AXISBANK
552
577
595
620
639
BAJAJ-AUTO
2,384
2,457
2,512
2,585
2,640
BANKBARODA
151
154
156
158
161
BHEL
257
272
280
294
302
BPCL
853
896
923
967
994
BHARTIARTL
414
420
425
431
436
BOSCH LIMITED
22,605
23,182
23,508
24,085
24,411
CAIRN
163
167
171
174
178
CIPLA
639
662
675
698
711
COALINDIA
404
417
429
442
454
DRREDDY
3,635
3,756
3,822
3,943
4,010
GAIL
354
363
371
380
387
GRASIM
3,518
3,608
3,666
3,755
3,813
HCLTECH
916
936
954
974
993
HDFCBANK
1,069
1,090
1,106
1,127
1,143
HDFC
1,220
1,273
1,323
1,376
1,426
HEROMOTOCO
2,498
2,574
2,626
2,702
2,754
HINDALCO
100
103
106
110
112
HINDUNILVR
867
896
919
947
970
ICICIBANK
308
313
317
322
326
IDEA
171
176
179
185
188
INDUSINDBK
880
908
923
951
967
INFY
910
956
980
1,026
1,051
ITC
303
313
318
328
333
KOTAKBANK
686
710
726
750
766
LT
1,824
1,848
1,868
1,892
1,912
LUPIN
1,813
1,893
1,938
2,018
2,063
M&M
1,217
1,257
1,279
1,319
1,342
MARUTI
3,832
4,012
4,121
4,301
4,410
NMDC
111
112
114
116
118
NTPC
127
131
133
138
140
ONGC
284
288
292
297
300
POWERGRID
135
138
140
143
145
PNB
140
142
145
147
150
RELIANCE
980
1,001
1,016
1,037
1,052
SBIN
264
267
271
275
278
SUNPHARMA
885
916
937
968
988
TCS
2,442
2,503
2,537
2,598
2,631
TATAMOTORS
369
384
395
410
421
TATAPOWER
69
73
75
78
80
TATASTEEL
276
280
283
288
291
TECHM
456
479
493
515
529
ULTRACEMCO
3,071
3,147
3,198
3,274
3,325
VEDANTA
139
142
146
149
152
WIPRO
534
551
566
584
599
YESBANK
768
796
816
844
864
ZEEL
349
363
375
389
400
Technical Research Team
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July 18, 2015
Derivatives Review |
FII's forming aggressive longs in Index Futures
Nifty spot closed at 8609.85 this week against a close of 8360.55 last week. The Put-Call Ratio has increased from 1.05 to 1.22 levels
and the annualized Cost of Carry is positive at 4.96%. The Open Interest of Nifty Futures increased by 16.42%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 1.05 to 1.22 levels mainly due to
Implied Volatility (IV) for NIFTY has decreased from 15.61% to
open interest addition in put options. Good amount of build-
12.00%. Historical volatility (HV) of NIFTY is at 16.14% and
up was visible in 8700-8900 call options last week which are
that for BANKNIFTY is trading at 21.29%. Liquid counters having
long formation. On the other hand in put options significant
very high HV are TATACHEM, RECLTD, MARUTI, SOUTHBANK
open interest addition was visible in 8400-8600 strikes, we
and DIVISLAB. Stocks where HV are on lower side are SRF,
believe these are short positions. Maximum buildup in current
BANKBARODA, ADANIENT, UNITECH and MCLEODRUSS.
series has got shifted to 8700 call & 8500 put options.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 15.20 points
`2,18,176/- cr. to `2,42,434/- cr. Stock futures open interest
against a premium of 25.00 points to its spot. Next month
has increased from `61,060/- cr. to `65,889/- cr. Liquid
future is trading with premium of 52.25 points. Liquid counters
counters names which added significant positions last week
where CoC is high are HDFCBANK, ZEEL, BANKBARODA,
are ACC, AMBUJACEM, HINDUNILVR, ZEEL and DRREDDY.
GRASIM and KOTAKBANK. Stocks with negative CoC are
On the other hand unwinding was visible in counters like CAIRN,
TATASTEEL, TATAPOWER, IDFC, TECHM and ACC.
TCS, VEDL, CIPLA and HDFC.
Derivative Strategy
Scrip : TATASTEEL
CMP : `277.10
Lot Size : 1000
Exercise Date (F & O) :
30th. July 2015
View: Mildly Bullish
Strategy: Ratio Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
1000
TATASTEEL
280
JULY
CE
5.00
275
(`2.00)
SELL
2000
TATASTEEL
300
JULY
CE
1.50
285
`3.00
LBEP
-
`282/-
UBEP - `318/-
295
`13.00
305
`13.00
Max. Risk: Unlimited
Max. Profit: `18,000/-
If TATASTEEL continues to move above UBEP.
If TATASTEEL closes at Rs.300 level on expiry.
315
`3.00
NOTE: Profit can be booked before expiry if TATASTEEL moves in favorable direction and time value decays.
325
(`7.00)
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