For Private Circulation Only
Technical and Derivatives
| May 21, 2021
Bulls back in action, reclaims 15150 with some authority
Sensex (50540) / Nifty (15175)
Source: Trading View
Future outlook
Market continues with its recent trend where the opening on Monday happens either with an upside or a downside gap. For the
second straight week, markets started on a pleasant note owing to some recovery in the global markets. On the same day, Nifty
managed to move beyond 14900 first and on the following day, the sturdy wall of 15000 was thrashed convincingly. Everything
looked hunky dory but all of a sudden the global markets again became nervous and due to this, we witnessed a decent correction
to sneak below this psychosocial level. But market was not done with its surprises as we saw a spectacular rally on Friday to push the
Nifty at 2-month high.
We always say ‘All’s well that ends well’ and this week’s price action is the perfect example of it. Out of first four sessions, the bulls
and bears had their equal share and as expected the Friday became the real decider. The real catalyst behind this optimism was the
cooling off in the global bourses as well as various asset classes. Since, our markets had the inherent strength; this development
provided the impetus for the move towards 15200. Now, the way things are placed, retesting of the record high of 15431.75 looks
eminent. Before this, 15220 15340 are the levels to watch out for. On the flipside, it is important to note that the immediate base
has shifted higher towards 15000 – 14900, which is an encouraging sign.
Looking at the broad based participation on Friday, especially the way banking space is poised; we will not be surprised to head
towards record high in the first half of the forthcoming week. In fact, if all the other factors support, we may see new highs also in
the coming sessions. However having said we should not become too complacent and should keep a close track of how global
markets behave over the next few days. Any aberration on this aspect may again dent the possibility of a short term rally. It’s better
to take one step as a time and continue with a stock specific approach by following proper risk management.
For Private Circulation Only
Technical and Derivatives
| May 21, 2021
14900-15000 is a strong demand zone now
Nifty spot closed at 15175.30 this week, against a close of 14677.80 last week. The Put-Call Ratio has increased from 1.11 to 1.38.
The annualized Cost of Carry is positive at 12.39%. The Open Interest of Nifty Futures decreased by 2.01%.
Derivatives View
Nifty current month future closed with a premium of 30.90 points against a premium of 37.15 points to its spot. Next month future
is trading at a premium of 56.45 points.
In options segment, the build-up was scattered between 15100-15500 call and 14800-15100 put options. Maximum build-up in the
monthly series is placed in 15500 call and 15000 put options.
We began the week on a cheerful note tad above 14750 and witnessed smart buying interest. On Tuesday, we again opened with an
upside gap to reclaim the psychological mark of 15000 and extended the rally almost towards 15150. Unfortunately, nervousness in
the global market dented the traders’ sentiment and hence we witnessed some profit booking to drag index below 14900 mark. But,
we once again saw decent buying interest on Friday to eventually conclude the week at the highest point. In F&O space, we saw
blend of long and short covering in Nifty; whereas, good amount of longs were formed in banking index. Options writers added
decent position in puts resulting shift in highest open interest in 15000 put and 15500 call. Stronger hand too participated by adding
longs and exiting shorts in index futures along with buying call and writing puts in index options. Meanwhile, their ‘Long Short Ratio’
surged from 42% to 61%. Considering the overall development, we expect continuation of ongoing rally towards life time highs.
Weekly change in OI
Short Formation
Chg (%)
BRITANNIA 2210600 20.78 3405.90 (2.83)
Long Formation
Chg (%)
BOSCHLTD 160300 40.99 15293.55 10.64
For Private Circulation Only
Technical and Derivatives
| May 21, 2021
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]g.com
Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jai[email protected].com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]ng.com
Sneha Seth Derivatives Analyst [email protected]gelbroking.com