Technical and Derivatives Review | July 20, 2019
Sell-off continues post minor relief
Sensex (38337) / Nifty (11419)
Source: Trading View
Future outlook
Post the budget announcements, our market looked extremely depressed as it triggered sell off in some of the marquee
outperformers as well. Towards the fag end of the previous week, this selling somehow got arrested and our markets started
attempting to give some recovery. The follow up of this recovery mode was seen at the start of the week gone by and in the process,
Nifty managed to retest the 11700 mark. However, no relief on the FPI surcharge in the midweek parliamentary session triggered yet
another bout of sell off and in last two days, index completely took a nosedive to breach all recent crucial supports.
Recently, index first breached its crucial swing low of 11640 and then gave a weak recovery towards 11700. Now due to the selloff in
last two days, Nifty has completely filled its upward gap area created post the exit poll numbers and importantly is on the verge of
confirming a breakdown from the multi-month trend line support of 11400. To worsen this, banking index tanked below 30300 and
midcap index got hammered once again to activate the bearish scenario. If we look at the price structures, the picture looks
extremely scary. Going ahead, if we do not get any relief with respect to recent concerns, then traders should ideally prepare
themselves for further decline towards 11250 - 11108.
The entire traders’/ investors’ community is completely disgusted and frustrated with the kind of underperformance we have seen
for such a long period of time from the broader market. At this juncture, traders should strictly avoid aggressive positions and should
ideally look to accumulate marquee names in a staggered manner with a slightly longer horizon.
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Technical and Derivatives Review | July 20, 2019
No meaningful shorts despite sharp fall
Nifty spot closed at 11419.25 this week, against a close of 11552.50 last week. The Put-Call Ratio has decreased from 1.15 to 1.05.
The annualized Cost of Carry is positive at 1.39%. The Open Interest of Nifty Futures has increased by 1.00%.
Derivatives View
Nifty current month future closed with a premium of 2.60 points against a discount of 8.15 points to its spot. Next month future is
trading with a premium of 42.20 points.
As far as Nifty options activities for the week are concerned, we saw good amount of build-up in 11500-11700 call options. On the
other side, 11300-11400 puts added decent positions. Maximum open interest for the monthly series now stands at 11600 call and
11300 put option.
During the week, we saw some respite in the benchmark index to reclaim 11700 mark. However, 11700 acted as a very strong hurdle
and we witnessed at sharp selling on Friday’s session to drag index towards 11400. In F&O space, we hardly saw any meaningful
build-up in both the indices; the overall OI activity remained mixed. At present, 11350-11400 is a support zone; whereas, 11700 may
act as a strong resistance. Considering Friday’s sell-off, traders are advised to say light in index and prefer stock specific approach for
the expiry week.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
MCX
2082500
31.12
859.70
3.42
RBLBANK
11502000
100.99
501.55
(21.37)
IGL
4774000
24.00
319.90
3.66
OIL
13385262
61.20
157.90
(8.54)
DABUR
13596250
19.42
419.70
2.70
TATAELXSI
2346600
50.37
701.25
(17.41)
COLPAL
2201500
13.17
1167.65
2.19
AMARAJABAT
1765400
32.25
603.60
(6.33)
ZEEL
24566100
10.03
352.55
1.19
BEL
37050000
31.19
98.40
(6.69)
Weekly change in OI
2
Technical and Derivatives Review | July 20, 2019
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
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