Technical Picks | February 20, 2016
Finally some respite for the bulls; 7280 now crucial to overcome
Sensex (23709) / Nifty (7211)
Trading for the week kick started with a decent upside gap
Exhibit 1: Nifty Weekly chart
on Monday with our markets drawing influence from a relief
rally witnessed across most globe markets. In fact, the
optimism accelerated as the day progressed, which
eventually resulted in a strong rally on Monday. However,
the bears were reluctant to give in easily and we thus saw an
immediate corrective move of nearly 200 points on the Nifty
from the highs by the first half on Wednesday. But this time
the bears lacked the strength to sustain the market at lower
levels and could not hold on against the underlying positive
conviction in the market, thus resulting in the Nifty giving a
v-shaped recovery and eventually closing the week with a
decent gain of 3.29% over the previous week’s closing.
Source: Company, Angel Research
Pattern formation:
Exhibit 2: Nifty Daily chart
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at 25213 / 7644 and 25725 /
7777 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at 24016 / 7277 and 25226 /
7664 levels, respectively.
Future outlook
Finally the bulls had something to cheer about as the
relentless bear hammering lost steam by the end of the
previous week. Last Friday’s ‘Bullish Hammer’ proved its
significance as we saw the biggest single day rally in
Source: Company, Angel Research
calendar year 2016 on Monday. Despite some intra-week
hiccups, the Nifty eventually managed to conquer the 7200
Firstly, it’s the daily ’20 EMA’ while the other being the
mark on a closing basis. On the minor degree (hourly)
‘Parabolic SAR’ indicator. Going forward, an extended up
chart, the ‘Higher Top Higher Bottom’ is now clearly visible.
move is expected only if the Nifty manages to traverse this
The price action is also supported by the positive placement
hurdle on a sustainable basis. In this scenario, 7380 - 7400
of the daily ‘RSI-Smoothened’ oscillator. Thus, we expect this
can be retested. On the flipside, 7127 - 7100 are now seen
momentum to continue and the Nifty could now test the
as immediate support levels for the index. In the forthcoming
7280 mark. However, traders need to reassess their existing
week, we expect stock specific action to continue; traders
positions once the Nifty approaches this hurdle as there are
should concentrate on these moves by following strict stop
some key technical evidences converging around it.
losses.
For Private Circulation Only
1
Technical Picks | February 20, 2016
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
22,615
23,162
23,468
24,015
24,322
NIFTY
6,867
7,039
7,133
7,305
7,399
NIFTY BANK
13,569
13,957
14,280
14,667
14,990
ACC
1,172
1,222
1,248
1,298
1,325
ADANIPORTS
171
190
203
222
235
AMBUJACEM
182
188
193
199
204
ASIANPAINT
806
830
851
876
896
AXISBANK
369
381
402
413
434
BAJAJ-AUTO
2,192
2,324
2,396
2,527
2,599
BANKBARODA
107
123
135
151
163
BHEL
92
97
103
108
115
BPCL
692
729
769
806
846
BHARTIARTL
300
313
322
334
343
BOSCH
15,469
16,137
16,518
17,186
17,567
CAIRN
115
123
129
137
143
CIPLA
493
509
529
545
565
COALINDIA
292
302
316
327
341
DRREDDY
2,667
2,863
3,009
3,204
3,350
GAIL
293
310
324
341
355
GRASIM
3,316
3,372
3,441
3,497
3,566
HCLTECH
793
822
840
869
886
HDFC
947
968
980
1,002
1,014
HDFCBANK
1,014
1,037
1,070
1,093
1,125
HEROMOTOCO
2,346
2,526
2,618
2,798
2,891
HINDALCO
58
64
67
72
75
HINDUNILVR
774
801
816
843
859
ICICIBANK
180
189
198
208
217
IDEA
99
104
108
113
117
INDUSINDBK
798
820
835
857
872
INFY
1,051
1,089
1,112
1,150
1,172
ITC
282
294
300
311
318
KOTAKBANK
597
614
627
644
657
LT
1,020
1,085
1,130
1,195
1,240
LUPIN
1,629
1,709
1,773
1,853
1,917
M&M
1,126
1,178
1,214
1,266
1,301
MARUTI
3,407
3,493
3,645
3,731
3,883
NTPC
120
125
128
133
136
ONGC
189
200
206
217
223
POWERGRID
135
138
140
143
145
PNB
65
71
75
80
85
RELIANCE
891
918
943
970
995
SBIN
143
154
162
173
182
SUNPHARMA
797
831
854
887
910
TCS
2,209
2,264
2,296
2,351
2,383
TATAMOTORS
287
303
313
329
340
TATAPOWER
54
57
59
61
64
TATASTEEL
209
231
244
266
278
TECHM
405
423
433
450
460
ULTRACEMCO
2,692
2,768
2,817
2,893
2,941
VEDL
61
68
73
80
84
WIPRO
506
527
538
559
570
YESBANK
665
689
725
749
786
ZEEL
336
360
374
398
411
Technical Research Team
For Private Circulation Only
2
Derivatives Review | February 20, 2016
We have seen buying by FIIs in this bounce back
Nifty spot closed at 7210.75 this week, against a close of 6980.95 last week. The Put-Call Ratio has increased from 0.78 to 0.79
levels and the annualized Cost of Carry is positive at 1.43%. The Open Interest of Nifty Futures increased by 9.58%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased marginally from 0.78 to 0.79 levels
Implied Volatility (IV) for NIFTY has decreased from
due to open interest addition in put options. In call options,
20.97% to 16.13%. Historical volatility (HV) of NIFTY is at
7300 and 7400 strikes added some OI; while, unwinding
25.54% and that for BANKNIFTY is at 31.63%. Liquid
was seen in 7000 and 7100 call options. Whereas, in put
counters having very high HV are BANKBARODA, IOC,
options,
7000
-
7100 strikes added decent build-up,
NMDC, UCOBANK and LT. Stocks where HV are on lower
followed by unwinding in
6500,
7300 and 7400 put
side are POWERGRID, HDFC, HDFCBANK, ABIRLANUVO
options. Maximum build-up in current series is seen in
and WOCKPHARMA.
7400 call options and 7000 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 1.70
`2,35,101/- cr. to `2,47,612/- cr. Stock futures open
points against a premium of 9.05 points to its spot. Next
interest has increased from `56,213/- cr. to `61,411/- cr.
month future is trading with premium of 21.45 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are IDFC, BHEL,
week are TATAPOWER, NMDC, BANKBARODA, BHEL and
HINDALCO, MARUTI and DLF. Stocks with negative CoC
CIPLA. On the other hand unwinding was visible in counters
are NMDC, BHARTIARTL, ACC, CAIRN and AMBUJACEM.
like ACC, PNB, HINDALCO, NTPC and AMBUJACEM.
Derivative Strategy
Scrip: HINDUNILVR
CMP : `827.60
Lot Size : 600
Exercise Date (F & O) :
25th Feb 2016
View: Bullish
Strategy: Long Call
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
600
HINDUNILVR
840
FEB
CE
3.00
820
(`3.00)
BEP - `843.00
830
(`3.00)
840
(`3.00)
Max. Risk: `1800
Max. Profit: Unlimited
If HINDUNILVR continues to move below `840
If HINDUNILVR continues to move above `843 on
850
`7.00
on expiry
expiry
860
`17.00
NOTE: Profit can be booked before expiry if HINDUNILVR moves in favourable direction.
870
`27.00
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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