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Technical and Derivatives Review | September 20, 2019
For Private Circulation Only
The masterstroke from FM, market takes a giant leap from lows
Sensex (38015) / Nifty (11274)
Source: Trading View
Future outlook
The entire week market looked depressed and the way it was grinding towards the recent lows, traders’ / investors’ were almost losing all
hopes from the market. The FM tried lot many things in last few weeks to boost the sentiments; but seems she had saved her masterstroke
for the right time. Today finally she delivered which could lift the sentiments and that has clearly been proven by such a mesmerizing
reaction from the market. The buying commenced the moment FM initiated her speech and it went to a different level for next couple of
hours. Finally this became the historical day for our markets as we clocked biggest ever intraday gains to take a giant leap from 10700.
Now the point is what’s next? Firstly, one has to understand that the low hanging fruit is already gone after this colossal rally. But this is not
the end of it; there are further legs to unfold from hereon. With reference to our previous articles, we did some Time Retracement
analysis taking into a consideration few historical evidences. For ‘Nifty Midcap’ index, the September month was the 21st month from
January 2018 peak. And on last couple of occasions (historically), the downtrend got arrested after 21st and 34th month. As per the
Fibonacci series, both 21 and 34 are part of it and hence hold some significance. In addition, for Nifty, last week was the 21st week as per
the ‘Time Retracement’ and thus, we were hoping for some respite. Considering this week’s correction, our final hope was the recent low
of 10637.15. Fortunately it remained defended and with today’s developments, the market seemed to have validated our hypothesis on
‘Time Retracement’. Now, we have finally managed to thrash the recent sturdy wall of 11200 with some authority. Although, we are
considerably higher in a single day, traders should continue to remain on the long side and soon we expect Nifty to head towards 11450
11550 or may be beyond.
As far as supports are concerned, 11150 followed by 11000 would now be seen as a sheet anchor. Any decline (if any) should be construed
as a buying opportunity. Today, almost all sectors (especially the beaten down) soared as if there is no tomorrow. One needs to identify apt
candidates who are likely to extend this lead. The FM has finally delivered and market has finally turned cheerful to bring back wider smiles
on the faces of market participants.
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Technical and Derivatives Review | September 20, 2019
For Private Circulation Only
Highest ever intraday gain after FM slashes the corporate tax
Nifty spot closed at 11274.20 this week, against a close of 11075.90 last week. The Put-Call Ratio has increased from 1.34 to 1.39.
The annualized Cost of Carry is positive at 11.49%. The Open Interest of Nifty Futures has increased by 21.47%.
Derivatives View
Nifty current month future closed with a premium of 21.30 points against a premium of 29.65 points to its spot. Next month future
is trading with a premium of 60.45 points.
As far as Nifty options activities for the week are concerned, we saw some build-up in 11500-11600 call option. On the other side,
11000-11300 put added huge amount of positions. Maximum open interest for the monthly series now stands at 11500 and 11000
put option.
Post strong closing on Friday, we began the week lower due to surge in crude price on account of drone attack in Saudi facility. The
benchmark index remained under pressure for next three sessions to test 10700 mark. On Friday, the Finance minister slashed
corporate tax for domestic companies that boosted the market to give biggest ever intraday gain of 5.5%. In the course of action,
Nifty surpassed the hurdles of 11000 & 11200 and concluded the week tad above 11250 mark. Previously, we have been consistently
seeing short formation in index futures and FIIs too have been selling equities. Considering the recovery seen on Friday, we expect
further short covering rally going ahead; hence, traders are advised utilising any dips in market to add-on fresh longs.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
CESC 1218400 53.07 845.85 2.23
DRREDDY 3758250 22.12 2840.55 3.63
COLPAL 1673700 21.93 1402.60 11.56
AMARAJABAT 1880200 19.86 667.95 3.46
CONCOR 3718377 17.48 558.15 4.93
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
EQUITAS 15512000 25.95 99.45 (15.22)
PEL 4866126 23.39 1853.25 (2.98)
STAR 2452800 20.24 361.85 (8.09)
GMRINFRA 173295000 19.34 16.65 (2.92)
UJJIVAN 8916800 18.35 311.20 (3.43)
Weekly change in OI
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Technical and Derivatives Review | September 20, 2019
For Private Circulation Only
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearch-cso@angelbroking.com
For Derivatives Queries E-mail: deriv[email protected]angelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.c[email protected]broking.com
Ruchit Jain Technical Analyst ruchi[email protected]broking.com
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com
Sneha Seth Derivatives Analyst sneha.set[email protected]lbroking.com