Technical and Derivatives Review | January 19, 2018
Large cap outperforms but cautionary sign from Midcap index
Sensex (35512 ) / Nifty (10895)
Source: Trading View
Future outlook
On Friday, our markets started on a positive note owing to improved sentiment after the government decided to cut tax rates on
certain products and services. Subsequently, Index traded in a range during the early hours of the trading session. However, a strong
up move in the last few hours pushed Index to kiss yet another milestone of 10900. The clear shining stars were private banks as
Bank Nifty ended tad near the 27000 mark.
The week gone by was high action-packed, as some of the news like government allowing an increase in FDI limits in the banking
sector and GST council cuts rates on certain products and services acted as supplementary for the bulls. However, the up move was
not an easy ride with some signs of weakness was seen during Tuesday and Thursday when Index came off from its highs impacting
the midcap and small cap stocks on a larger scale which collapsed like nine pins. The recent up move has been supported with
selective heavyweight counters and Banks conglomerates; it seems that the bulls are not at all willing to give up and with the
important event (Union Budget) being around the corner some or the other sector is supporting the Index to extend further up.
Technically, Index has now rallied around 350 points in January and momentum RSI has now reached in a deep overbought territory.
Going ahead, one needs to see how markets behave at higher levels as the possibility of seeing some profit booking cannot be ruled
out. For the coming week, we are likely to see choppy trades with higher volatility as we head for the F&O expiry week which is a
truncated one. As far as levels are concerned, 10940-11000 are likely to act an immediate hurdle; whereas, on the downside, 10800
would be seen as immediate and important support levels. At this juncture, a prudent strategy would be to stay light on positions
and book positions in long at higher levels.
For Private Circulation Only
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Technical and Derivatives Review | January 19, 2018
Options data hints expiry above 10800 mark
Nifty spot closed at 10894.70 this week, against a close of 10681.25 last week. The Put-Call Ratio remains unchanged at 1. 74 levels
and the annualized Cost of Carry is positive at 3.55%. The Open Interest of Nifty Futures increased by 13.24%.
Derivatives View
Nifty current month future closed with a premium of 6.35 points against a premium of 5.10 points to its spot. Next month future is
trading with a premium of 26.30 points.
PCR-OI remains unchanged at 1.74 on week on week basis. In call options, some build-up was seen in 10900 and 11100 strikes;
followed by unwinding in 10600-10700 call options. On the flip side, we witnessed significant open interest addition in 10700-10900
put options. Now, maximum open interest is placed at 11000 call and 10500 put options.
The benchmark index extended its gains to touch the yet another milestone of 10900 mark; meanwhile, we witnessed good amount
of long formation in index futures during the week. As far as FIIs activities are concerned, they formed mixed positions in index
futures; however, they continue adding long positions in stock futures and index call options along with writing in index put options.
Considering the above data points, we believe 10750-10800 has become an immediate support for index now; whereas, Nifty put
options activities suggests, hurdle around 11000 mark. Hence, we would still advise traders avoiding any bearish bets until we don’t
see any meaningful change in data.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
ICICIBANK
97058500
21.49
353.80
10.94
IDFC
204309600
17.12
58.20
(11.75)
MINDTREE
2916000
33.00
701.40
10.93
MCX
4469000
10.28
838.95
(11.23)
JUBLFOOD
4009500
40.36
2093.10
9.14
RNAVAL
40464000
16.69
50.15
(10.45)
HDFC
19253000
40.35
1905.80
8.26
FEDERALBNK
86526000
10.94
103.45
(10.28)
PCJEWELLER
17346000
40.73
589.20
6.76
CAPF
6738400
17.41
767.10
(8.85)
Weekly change in OI
For Private Circulation Only
2
Technical and Derivatives Review | January 19, 2018
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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