Technical Picks | May 21, 2016
Positional traders should wait for clear direction
Sensex (25302) / Nifty (7750)
The opening session of the week opened a tad higher with
Exhibit 1: Nifty Weekly chart
the market citing positive cues from its other Asian peers.
However, the optimism was short lived and the market fell
back into the shadow of negativity that we saw at the
previous weekend. Later in the day, the bulls found some
respite in the form of a spectacular recovery in the last
couple of hours of trading and this revived their hopes of
staying in the game in the hunt for profits for the remaining
part of the week. The bullish sentiment spilled over Tuesday
but once again as the index edged closer to the strong
hurdle at 8000, the market started losing strength and
underwent a fair amount of profit booking. The move could
not extend beyond the 7940 mark, which is the concluded
week’s high. This was followed by some consolidation on
Wednesday and then a corrective move in the last two
Source: Company, Angel Research
sessions of the week, thus leading the Nifty to conclude the
week well below the 7800 mark with a cut of 0.83% over the
Exhibit 2: Nifty Daily chart
previous week close.
Key Moving Averages:
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
25221
/
7694 and
25568 / 7750 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
25511
/
7813 and
25217 / 7697 levels, respectively.
Future outlook
The indecisiveness continued on Dalal Street in the week
gone by; however, it must be noted that the last two sessions
Source: Company, Angel Research
of the week were completely dominated by the bears. It's
been more than a month now that the Nifty has been
A sustainable move below it may lead to further correction
vacillating within the narrow range of 300 - 350 points. In
towards the April month low of 7516.85. At the current
fact, this range has now shrunk to merely 200 points as
juncture, if we look at the ‘Fibonacci Time Series’ from the
witnessed in the concluded week’s trading. Practically, there
bottom of 6825.80, the Nifty will be completing its 8th Time
have been a lot of significant developments on the global as
zone (21 days) and will enter the 9th time zone of ‘34 Days’
well as the domestic front in the recent past and although
on Monday. Generally, such points are seen as ‘Potential
they have jolted our market on both sides, but not with the
Reversal Zones’ and hence, as long as the Nifty manages to
magnitude of giving it a clear and decisive direction.
hold 7678.35, we would hope for this new ‘Time Zone’ to
Technically speaking, the Nifty is now trading slightly above
turn positive for our markets. On the upside, 7940 - 8000
the recent swing low of 7678.35, which almost coincides
levels are seen as major hurdles for the index. It's advisable
with the daily ’89 EMA’ as well as the ‘Parabolic SAR’
to stay light on positions as traders generally get caught on
indicator. Going forward, traders would be meticulously
the wrong foot (on both sides) in such prolonged sideways
tracking this support zone as it could act as a trend deciding
movements.
level in the near term.
For Private Circulation Only
1
Technical Picks | May 21, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
25,302
24,818
25,060
25,494
25,736
NIFTY
7,750
7,604
7,677
7,809
7,881
NIFTY BANK
16,481
16,134
16,308
16,605
16,779
ACC
1,393
1,339
1,366
1,417
1,444
ADANIPORTS
178
157
168
180
190
AMBUJACEM
209
200
205
212
216
ASIANPAINT
956
931
943
958
970
AUROPHARMA
770
739
755
777
793
AXISBANK
491
463
477
491
505
BAJAJ-AUTO
2,453
2,358
2,405
2,470
2,518
BANKBARODA
135
124
130
140
145
BHEL
119
114
117
121
123
BPCL
921
889
905
931
947
BHARTIARTL
342
327
335
347
354
INFRATEL
378
363
370
381
388
BOSCH
21,050
19,970
20,510
21,180
21,720
CIPLA
507
481
494
514
527
COALINDIA
279
274
276
281
284
DRREDDY
3,034
2,881
2,957
3,003
3,080
EICHERMOT
18281
17420
17850
18530
18960
GAIL
372
359
365
377
383
GRASIM
4,207
4,129
4,168
4,239
4,278
HCLTECH
737
704
720
732
749
HDFCBANK
1,141
1,109
1,125
1,147
1,163
HDFC
1,180
1,121
1,150
1,190
1,220
HEROMOTOCO
2,897
2,806
2,851
2,905
2,951
HINDALCO
87
83
85
88
90
HINDUNILVR
812
779
796
823
840
ICICIBANK
220
211
216
222
227
IDEA
109
102
106
110
114
INDUSINDBK
1,070
1,034
1,052
1,076
1,094
INFY
1,202
1,181
1,191
1,208
1,219
ITC
330
307
319
329
340
KOTAKBANK
702
684
693
709
718
LT
1,255
1,212
1,233
1,273
1,295
LUPIN
1,505
1,372
1,439
1,564
1,630
M&M
1,293
1,248
1,270
1,311
1,334
MARUTI
3,945
3,742
3,844
3,906
4,008
NTPC
137
129
133
137
141
ONGC
213
194
204
209
219
POWERGRID
145
141
143
144
146
RELIANCE
934
898
916
950
968
SBIN
171
161
166
176
181
SUNPHARMA
791
782
787
795
799
TCS
2,529
2,479
2,504
2,548
2,573
TATAMTRDVR
263
251
257
268
275
TATAMOTORS
384
372
378
388
394
TATAPOWER
69
67
68
69
71
TATASTEEL
323
308
316
326
334
TECHM
476
462
469
482
489
ULTRACEMCO
3,134
3,026
3,080
3,175
3,229
WIPRO
543
529
536
542
549
YESBANK
978
920
949
974
1,003
ZEEL
434
413
423
441
452
Technical Research Team
For Private Circulation Only
2
Derivatives Review | May 21, 2016
Mixed positions being witnessed, avoid aggressive trades
Nifty spot closed at 7749.70 this week, against a close of 7814.90 last week. The Put-Call Ratio has decreased from 0.88 to 0.83
levels and the annualized Cost of Carry is positive at 10.71%. The Open Interest of Nifty Futures increased by 7.15%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.88 to 0.83 levels, mainly due
Implied Volatility (IV) for NIFTY has decreased from
to OI addition in call options. Last week, we witnessed good
15.02% to 14.65%. Historical volatility (HV) of NIFTY is at
build-up in 7700 - 7900 call options; while, unwinding was
17.29% and that for BANKNIFTY is at 21.75%. Liquid
seen in 8300 strike. While in put options, 7900 added
counters having very high HV are SUNTV, LUPIN,
some fresh positions. Maximum OI in current series is
MOTHERSUMI, BANKBARODA and KTKBANK. Stocks
visible in 8000 call and 7700 put options.
where HV are on lower side are TITAN, WIPRO,
TVSMOTOR, CROMPGREAV and INFY.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 13.65
`2,28,607/- cr. to `2,46,929/- cr. Stock futures open
points against a premium of 15.65 points to its spot. Next
interest has increased from `60,400/- cr. to `63,083/- cr.
month future is trading with premium of 18.25 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are BOSCHLTD,
week are BANKBARODA, LUPIN, NTPC, TATAMTRDVR and
TATAPOWER, BAJAJ-AUTO, BPCL and TATAMTRDVR.
HINDUNILVR. On the other hand unwinding was visible in
Stocks with negative CoC are IDEA, YESBANK,
counters like HCLTECH, ONGC, YESBANK, BPCL and
TATAMOTORS, DRREDDY and POWERGRID.
MARUTI.
Derivative Strategy
Scrip: RCOM
CMP : ` 50.15/-
Lot Size : 8000
Exercise Date (F & O) :
26th May 2016
View : Volatile
Strategy: Long Straddle
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
8000
RCOM
50
MAY
CE
0.80
46
`2.40
BUY
8000
RCOM
50
MAY
PE
0.80
48
`0.40
LBEP - ` 48.40/-
UBEP - ` 51.60/-
50
(`1.60)
52
`0.40
Max. Risk: `12,800
Max. Profit: Unlimited/-
If RCOM closes at `50 on expiry.
If RCOM continues to move above UBEP or below LBEP.
54
`2.40
NOTE: Profit can be booked before expiry if RCOM moves in either direction.
56
`4.40
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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