Technical Picks | March 19, 2016
Be with the flow, support trails higher to 7400
Sensex (24953) / Nifty (7604)
Trading for the week started off on Monday with a marginal
Exhibit 1: Nifty Weekly chart
upside gap, encouraged by positive global cues.
Subsequently, the Nifty traded in a narrow range and
eventually closed the day around the opening level. This was
followed by a weak opening on Tuesday; the index
continued to be fragile throughout the day and closed with a
cut of nearly a percent over the previous day’s close. The
pessimism continued during early trades on Wednesday
also; however, we witnessed a sharp recovery in the latter
half of the day, leading the Nifty to end the session just a tad
below the 7500 mark. On Thursday, the Nifty opened on a
strong note on the back of the positive outcome of the
FOMC meet, but somehow the optimism fizzled out as the
index approached closer to the strong hurdle of
7600.
Source: Company, Angel Research
Finally a convincing broad base rally on Friday pushed the
index beyond the 7600 mark and it concluded trading at the
Exhibit 2: Nifty Daily chart
highest point of the week. The Nifty ended the week with a
modest gain of 1.25% over the previous week’s closing.
Pattern formation:
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
24842
/
7547 and
25611 / 7746 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
24372
/
7409 and
24967 / 7586 levels, respectively.
Future outlook
The previous week’s consolidation was followed by an
Source: Company, Angel Research
extension of the sideways trend for a major part of the week.
However, this week’s trading range was slightly wider as the
However, having said that, it would be a prudent strategy to
Nifty managed to give wild intraday swings on both sides.
either keep booking profits wherever it’s possible or to keep
Finally, on Friday, we saw the Nifty traversing the stiff hurdle
trailing stop losses to safeguard your profits. The important
of 7600 on a closing basis. This hurdle coincided with
technical reason behind this cautious approach is the non-
multiple technical evidences and thus, this price action can
appearance of a ‘Higher Bottom’ on the daily chart, which
be interpreted as a favorable development in the near term.
would have provided credence to the current rally. On the
Considering the ongoing optimism, we may expect this
downside, last week’s low of 7405 would now act as an
move to extend towards 7720 - 7750 levels where we see a
important support level for the Nifty. Only a breach of this
cluster of resistances. As of now, traders are advised to be
level would apply immediate brakes on the optimism.
with the flow and not pre-empt any reversal until we see
definite signals.
For Private Circulation Only
1
Technical Picks | March 19, 2016
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,953
24,132
24,543
24,765
25,175
NIFTY
7,604
7,333
7,468
7,541
7,677
NIFTY BANK
15,655
14,986
15,321
15,513
15,847
ACC
1,337
1,190
1,263
1,302
1,376
ADANIPORTS
242
216
229
236
249
AMBUJACEM
222
194
208
216
230
ASIANPAINT
875
834
855
881
901
AXISBANK
436
402
419
428
445
BAJAJ-AUTO
2,303
2,180
2,242
2,275
2,337
BANKBARODA
144
137
141
144
147
BHEL
113
99
106
110
118
BPCL
857
769
813
841
885
BHARTIARTL
344
323
334
343
353
BOSCH
18,774
17,358
18,066
18,458
19,166
CAIRN
155
142
149
152
159
CIPLA
528
502
515
529
543
COALINDIA
298
289
294
296
301
DRREDDY
3,171
2,981
3,076
3,162
3,257
GAIL
364
320
342
354
377
GRASIM
3,657
3,469
3,563
3,634
3,728
HCLTECH
824
798
811
821
834
HDFC
1,028
998
1,013
1,026
1,041
HDFCBANK
1,129
1,054
1,092
1,133
1,171
HEROMOTOCO
2,791
2,696
2,743
2,771
2,819
HINDALCO
85
77
81
84
88
HINDUNILVR
848
817
833
846
862
ICICIBANK
230
211
220
228
238
IDEA
102
96
99
101
104
INDUSINDBK
929
888
909
922
942
INFY
1,193
1,104
1,149
1,174
1,219
ITC
325
310
318
322
329
KOTAKBANK
659
622
640
651
669
LT
1,199
1,149
1,174
1,190
1,216
LUPIN
1,554
1,315
1,435
1,655
1,774
M&M
1,223
1,162
1,192
1,214
1,244
MARUTI
3,621
3,450
3,536
3,643
3,729
NTPC
127
125
126
127
128
ONGC
215
201
208
211
218
POWERGRID
137
134
135
138
139
PNB
84
79
82
83
86
RELIANCE
1,027
978
1,003
1,020
1,044
SBIN
191
177
184
188
195
SUNPHARMA
816
752
784
830
862
TCS
2,426
2,264
2,345
2,388
2,468
TATAMOTORS
366
346
356
363
373
TATAPOWER
59
57
58
59
59
TATASTEEL
302
289
296
301
307
TECHM
492
442
467
482
507
ULTRACEMCO
3,111
2,898
3,005
3,061
3,167
VEDL
92
82
87
90
95
WIPRO
551
519
535
544
561
YESBANK
814
783
799
809
824
ZEEL
391
365
378
393
405
Technical Research Team
For Private Circulation Only
2
Derivatives Review | March 19, 2016
Banking space may continue it’s up move
Nifty spot closed at 7604.35 this week, against a close of 7510.20 last week. The Put-Call Ratio has increased from 0.96 to 0.99
levels and the annualized Cost of Carry is positive at 0.35%. The Open Interest of Nifty Futures increased by 1.24%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.96 to 0.99 levels mainly due
Implied Volatility (IV) for NIFTY has decreased from
to huge OI addition in put options. 7400-7600 strikes of
14.33% to 12.25%. Historical volatility (HV) of NIFTY is at
put options added good amount of OI, we believe it’s more
22.58% and that for BANKNIFTY is at 30.70%. Liquid
of writing which took place as IV’s plunged last week. In call
counters having very high HV are DLF, WOCKPHARMA,
options, 7600 and 7700 strikes added decent fresh build-
UCOBANK, HDIL and SAIL. Stocks where HV are on lower
up. Maximum build-up in current series has shifted from
side are KOTAKBANK, INDUSINDBK, GRASIM, WIPRO
7500 to 7700 call options and of put options from 7200 to
and ULTRACEMCO.
7400 strike price.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 0.95
`2,23,644/- cr. to `2,42,522/- cr. Stock futures open
points against a premium of 2.00 points to its spot. Next
interest has decreased from `55,606/- cr. to `55,972/- cr.
month future is trading with premium of 41.10 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are IDFC, PNB,
week are LUPIN, CAIRN, GAIL, AMBUJACEM and
POWERGRID, HDFCBANK and GRASIM. Stocks with
ICICIBANK. On the other hand unwinding was visible in
negative CoC are DLF, NMDC, HEROMOTOCO, GAIL
counters like ACC, NMDC, ONGC, BPCL and HDFC.
and BHARTIARTL.
Derivative Strategy
Scrip: BANKNIFTY
CMP : 15669.65
Lot Size : 30
Exercise Date (F & O) :
31st Mar 2016
View: Mildly Bullish
Strategy: Long Call.
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
30
BANKNIFTY
16000
MAR
CE
95.00
15500
(`95.00)
BEP - 16095
15700
(`95.00)
15900
(`95.00)
Max. Risk: `2,850/-
Max. Profit: Unlimited
If BANKNIFTY closes on or below strike price
If BANKNIFTY continues to move above BEP on expiry.
16100
`5.00
on expiry
16300
`205.00
NOTE: Profit can be booked before expiry if BANKNIFTY moves in favourable direction.
16500
`405.00
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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