1
For Private Circulation Only
Technical and Derivatives Review
| September 19, 2020
Some tentativeness around 11600 – 11650
Sensex (38846) / Nifty (11505)
Source: Trading View
Future outlook
In the previous week, our markets managed to defend the key support around 11250-11200 and had some recovery towards the fag
end. In continuation with this, we started the week on a positive note. Subsequently, Nifty continued its upwards trajectory but
there was no real momentum in the market. Slowly and steadily Nifty went slightly beyond the 11600 mark. However, the last
couple of sessions were a bit volatile and had some downward intraday swings to eventually conclude the week with negligible
gains.
During the first half, we participated in an upward move but towards the fag end, we once again turned a bit cautious as we still
believe that Nifty doesn't have enough strength to go pass the sturdy wall of 11650-11700 soon. We must either go through some
time wise or price wise correction before heading towards the 12000 mark. To add to this opinion, we observed a 'Bearish Wolfe’
pattern on the hourly chart at the end of the Wednesday's session. The said pattern proved its worth as we witnessed some hiccups
towards the latter part. Since, the overall undertone is strongly bullish, as of now there are no signs of complete sell off, rather it can
be interpreted as a small profit taking within the consolidation. For the coming week, 11600-11650-11700 remains to be a cluster of
resistance; whereas on the lower side, 11450-11380 are to be seen as crucial supports. Any aggravation below these points would
result in an extended correction in our market.
In the last three weeks, we had a couple of reality checks which we believe to be seen in-between the moves going forward. Hence,
one needs to remain cautious and should ideally avoid aggressive bets overnight. Banking space continues to be a spoilsport and in
fact, Friday's correction was solely led by banking stocks as the Bank Nifty slipped below the key support of 22000 during the
session. Hence, one needs to keep a close track on how this heavyweight space behaves in the first half. Despite all this, we must
accept that it was a week of various individual themes and stocks. IT had a great move in the initial part and the latter half was
completely dominated by the mesmerizing move in the Pharmaceutical universe. The way some of the stocks within this space just
took off, it was remarkable. One can still look to participate in such potential movers; but should adopt a proper risk management
strategy.
2
For Private Circulation Only
Technical and Derivatives Review
| September 19, 2020
Shorts in Bank Nifty leads to underperformance
Nifty spot closed at 11504.95 this week, against a close of 11464.45 last week. The Put-Call Ratio has decreased from 1.49 to 1.37.
The annualized Cost of Carry is positive at 5.45%. The Open Interest of Nifty Futures has increased by 1.30%.
Derivatives View
Nifty current month future closed with a premium of 10.30 points against a premium of 2.65 points to its spot. Next month future is
trading at a premium of 30.90 points.
As far as Nifty options activities are concerned, build-up was seen in 11500-12000 call options whereas some open interest additions
was seen in 11500-11400 put options too. Maximum open interest is now placed at 12000 call and 11500 put option.
We witnessed some positive biasness during the week wherein the index surpassed the 11600 mark. However, the Nifty corrected
from the intra-week highs at the fag end and ended with negligible gains. Although no major change was seen in Nifty, the banking
space underperformed the benchmark and short formation was seen in the Bank Nifty index. FII’s formed short positions during the
week when the market rallied; but they covered those shorts in Friday’s session. Their ‘Long Short Ratio’ is thus back around 55
percent which went below 50 percent during the week. In options segment, writing was seen from 11500-12000 call options. The
open interest data is scattered on the put side but interestingly, 11500 put option has good amount of open interest outstanding
and the index has closed around this support. It would be crucial to see how the put writers act in next couple of sessions. Overall,
there are no signs of any trended move in the Nifty, and hence, it is advisable for traders to trade with a stock specific approach and
watch out for developments at the start of the monthly expiry week.
Weekly change in OI
Short Formation
Scrip
Futures
OI
Chg (%)
Price
Price
Chg(%)
UBL 1598800 40.73 1021.65 (3.97)
NMDC
43469600
30.52
87.15
(3.38)
PVR
2229546
26.57
1206.80
(3.46)
SBIN
13046100
0
13.56
192.75
(5.28)
BAJAJFINSV
867000
12.12
5902.45
(4.08)
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
GLENMARK 9795700 37.92 509.45 5.21
M&M
16074800
12.85
655.45
6.40
APOLLOHOSP
1256500
12.64
1831.10
13.29
LUPIN
76
50000
11.65
1087.45
12.41
DRREDDY
3123750
10.10
5338.95
20.96
3
For Private Circulation Only
Technical and Derivatives Review
| September 19, 2020
Research Team Tel: 022 - 39357600 (Extn – 6844) Website: www.angelbroking.com
For Technical & Derivative Queries E-mail: [email protected]
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and
Portfolio Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking
Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration
number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for
accessing /dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed
public offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits
and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com
Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jai[email protected]om
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com
Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com