March 21, 2015
Technical Picks |
8500 - A crucial support for the bulls
Sensex (28261) / Nifty (8571)
Trading for the week began on a muted note with the Nifty
Exhibit 1: Nifty Weekly chart
opening marginally lower than the previous week's closing. The
index then oscillated within a narrow range throughout the
remaining session and eventually closed in the red. Tuesday's
session opened with a modest upside gap owing to positive
global cues. The session ended well inside the positive territory;
but we witnessed massive intraday volatility during the session.
Wednesday was a quiet session with the Nifty ending marginally
in the red. On Thursday, the Nifty witnessed a gap up opening
owing to cheerful mood across the globe post the FOMC meet.
However, the index failed to sustain itself at higher levels and
Source: Falcon
eventually corrected sharply to close in the negative. The
Exhibit 2: Nifty Daily chart
concluding session of the week continued with its previous day's
pessimism and eventually ended with the Nifty closing below
the 8600 mark. The FMCG, Auto, Realty, Capital Goods and
Banking sectors remained under pressure throughout the week;
whereas the Healthcare, IT and Consumer Durables counters
managed to trade with a positive bias. The Nifty ended the
concluded week with a cut of 0.89% over the previous week's
closing.
Pattern formation:
Source: Falcon
The '89-day EMA' and the '89-week EMA' are placed at
28270 / 8531 and 24747 / 7427 levels, respectively.
not bode well for the bulls. Hence, going forward, the 8500
mark is likely to be a strong and crucial support for the Nifty.
The '20-day EMA' and the '20-week EMA' are placed at
This level coincides with the daily '89 EMA' and hence, should
28781 / 8726 and 28260 / 8527 levels, respectively.
be given weightage. The bearish scenario may get confirmed
Future outlook
only if the Nifty closes below this important level of 8500. In
The price action seen in the previous week was very much in
this case, the possibility of it extending this corrective move
line with our expectations. Despite the Nifty violating an
towards 8380 - 8350 becomes quite high. However, if the said
important support level of 8670 during the second week of
scenario doesn't materialize and if we see buying emerging at
March, we maintain our view that the index is likely to consolidate
these levels, then we may witness a continuation of this
in the range of 8550 to 8800. It can be observed that our
consolidation phase. The Nifty then may move higher to retest
markets clearly shrugged off the positive development on the
8700 - 8750 levels. Considering all the above evidences and
global front, i.e. the unchanged Fed policy. The positive reaction
considering the possible volatility owing to the March 2015
post the event was very short lived as we witnessed a complete
derivatives series expiring in the coming week, we advise traders
nosedive from the high of 8788.20. We witnessed a strong
to trade with proper stop losses and avoid taking undue risks.
selling pressure across the broader market, which certainly does
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March 21, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,714
27,988
28,483
28,757
29,252
NIFTY
8,402
8,487
8,637
8,722
8,873
BANKNIFTY
18,008
18,307
18,840
19,139
19,672
ACC
1,501
1,536
1,582
1,616
1,663
AMBUJACEM
235
245
253
263
271
ASIANPAINT
779
794
821
837
863
AXISBANK
524
540
568
584
612
BAJAJ-AUTO
1,976
1,997
2,028
2,049
2,080
BANKBARODA
163
168
176
181
190
BHEL
231
238
252
260
273
BPCL
685
706
744
765
803
BHARTIARTL
364
372
386
394
408
CAIRN
209
217
223
231
237
CIPLA
660
680
703
723
747
COALINDIA
355
362
366
373
378
DLF
153
157
162
165
171
DRREDDY
3,222
3,325
3,402
3,504
3,582
GAIL
362
370
383
390
403
GRASIM
3,453
3,534
3,631
3,713
3,810
HCLTECH
925
952
993
1,021
1,062
HDFCBANK
1,026
1,041
1,057
1,072
1,089
HDFC
1,268
1,303
1,329
1,364
1,390
HEROMOTOCO
2,538
2,574
2,636
2,672
2,733
HINDALCO
117
125
130
138
144
HINDUNILVR
850
873
915
938
980
ICICIBANK
301
310
326
334
350
IDFC
161
164
168
171
175
INDUSINDBK
837
861
891
916
946
INFY
2,179
2,218
2,250
2,289
2,321
ITC
317
322
332
337
347
JINDALSTEL
135
150
171
186
207
KOTAKBANK
1,277
1,308
1,335
1,367
1,394
LT
1,602
1,636
1,687
1,722
1,773
LUPIN
1,811
1,858
1,909
1,957
2,007
M&M
1,102
1,134
1,186
1,218
1,270
MARUTI
3,558
3,591
3,643
3,676
3,728
NMDC
123
127
131
135
139
NTPC
132
139
149
156
166
ONGC
304
308
312
315
319
POWERGRID
142
145
148
151
153
PNB
153
158
164
169
175
RELIANCE
821
837
857
874
893
SSLT
174
181
192
198
209
SBIN
268
273
282
287
295
SUNPHARMA
972
1,000
1,037
1,064
1,102
TCS
2,527
2,569
2,594
2,635
2,660
TATAMOTORS
518
533
556
571
594
TATAPOWER
76
78
80
81
83
TATASTEEL
311
320
332
341
354
TECHM
643
661
691
708
738
ULTRACEMCO
2,737
2,796
2,895
2,954
3,052
WIPRO
618
635
646
663
674
ZEEL
324
339
355
370
386
Technical Research Team
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Derivatives Review |
Nifty on the lower side of the range
Nifty spot closed at 8570.90 this week against a close of 8647.75 last week. The Put-Call Ratio has decreased from 0.94 to 0.87
levels and the annualized Cost of Carry is positive at 22.11%. The Open Interest of Nifty Futures decreased by 2.89%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.94 to 0.87 levels mainly due to
Implied Volatility (IV) for NIFTY has decreased from 15.13%.to
open interest addition in call options. Huge buildup was visible
14.77%. Historical volatility (HV) of NIFTY is at 17.72% and
in 8600-8800 call options last week which are long formation
that for BANKNIFTY is trading at 28.91%. Liquid counters having
in the hopes market to strengthen from current levels. On the
very high HV are UNITECH, JINDALSTEL, HDIL, JUSTDIAL and
other hand in put options 8500 strike price added decent
STAR. Stocks where HV are on lower side are MARUTI, L&TFH,
buildup followed by unwinding in 8700-8900 put options.
HEROMOTOCO, HDFCBANK and INFY.
Maximum buildup in current series is seen in 9000 call & 8500
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 31.15 points
`2,38,105/- cr. to `2,49,267/- cr. Stock futures open interest
against the premium of 26.65 points to its spot. Next month
has decreased from `73,470/- cr. to `73,325/- cr. Liquid
future is trading with premium of 100.15 points. Liquid counters
counters names which added significant positions last week
where CoC is high are HDFCBANK, IFCI, UNITECH,
are HCLTECH, TECHM, NTPC, ICICIBANK and CIPLA. On the
TATACOMM and KTKBANK. Stocks with negative CoC are SAIL,
other hand unwinding was visible in counters like NMDC, PNB,
ENGINERSIN, ONGC, HAVELLS and GODREJIND.
ACC, BANKBARODA and ZEEL.
Derivative Strategy
Scrip : LT
CMP : `1674.50
Lot Size : 250
Exercise Date (F & O) :
26th. Mar 2015
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
250
LT
1700
MAR
CE
8.50
1625
(`8.50)
BEP
-
`1708.50
1655
(`8.50)
1685
(`8.50)
Max. Risk: `2,125/-
Max. Profit: Unlimited
If LT closes on or below strike price on expiry.
If LT continues to move above BEP.
1715
`6.50
1745
`36.50
NOTE: Profit can be booked before expiry if LT moves in favorable direction and time value decays.
1775
`66.50
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