Technical and Derivatives Review | June 21, 2019
11600 defended successfully, remain hopeful of a strong rally
Sensex (39194) / Nifty (11724)
Source: Investing.com
Future outlook
The global set up has been excellent throughout the week, in fact, US markets hastened towards all-time highs after recent
underperformance. However, we failed to capitalise on this positive development as some of the domestic wounds still continues to
hurt us badly. Barring Thursday’s session, there was no respite in our markets. Fortunately, despite various attempts to breach
11600, our benchmark managed to defend key levels and went on to confirm a weekly close tad above the 11700 mark.
During the early part of the week, index slipped below recent swing low of 11769, which triggered sharp selloff to retest sub-11700
levels. Despite a strong selling pressure, the Nifty managed to hold key support zone 11630 - 11591. These levels were critical
supports because 11591 is the higher end of the ‘Upward Gap Area’ created post the exit poll numbers. And 11630 being the 161%
Fibonacci retracement levels of the small up move from 11769.50 to 12000.35. This level coincided with the ‘Potential Reversal
Zone’ as per the ‘Bullish Wolfe Wave’ structure, which is clearly visible on hourly chart. Despite a strong selling pressure on many
occasions, we witnessed massive buying emerging in the zone of 11650 - 11630 and with Thursday’s colossal move, the said pattern
has been validated. Yes, Friday’s decline was a bit unexpected for us; but we still remain hopeful and expect the index to breakout
from the key hurdle of 11843.50. This would unfold the fresh upward leg of the rally to test 12000 first and then possibly fresh
record highs soon. This optimistic approach remains valid as long as we are trading above the sheet anchor support of 11630 -
11591.
Clearly, the banking index outperformed our benchmark in the week gone by and there were few other notable movers too on the
sectoral front. But, the way ‘Midcap’ index is shaped up, it clearly grabs our attention. The weekly chart looks extremely promising
and soon we will not be surprised to see a strong rally unfolding in this universe. But still traders are advised to be a bit fussy when it
comes to stock selection. It’s better to stick to quality midcaps that are likely to give decent moves and should ideally avoid such
consistent draggers despite giving eye-popping rebounds.
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Technical and Derivatives Review | June 21, 2019
Data hints a positive bias for the expiry week
Nifty spot closed at 11724.10 this week, against a close of 11823.30 last week. The Put-Call Ratio has increased from 1.26 to 1.34.
The annualized Cost of Carry is positive at 15.23%. The Open Interest of Nifty Futures has increased by 6.77.
Derivatives View
Nifty current month future closed with a premium of 29.35 points against a premium of 14.75 points to its spot. Next month future
is trading with a premium of 64.30 points.
As far as Nifty options activities for the week are concerned, fresh build-up was seen in 11800-12000 calls, whereas good amount of
open interest addition was seen in 11700 put option. Maximum open interest for coming weekly series now stands at 12000 call and
11700 put option.
During the week, the index rallied higher on the weekly expiry session from the support base of 11600-11650. In last couple of
trading sessions, we witnessed fresh long formations in BankNifty futures. Good open interest addition was witnessed in 11700 put
option which is a positive sign. Hence, 11700 followed by 11600 are the crucial supports for the coming expiry. Looking at the data,
we believe that the indices are likely to trade with a positive bias in the coming week and the banking space could see some
outperformance as we have seen fresh long formations in the banking index. Hence, traders are advised to trade with a positive bias
until we see any change in the above mentioned options data.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
HEXAWARE
2698500
50.67
397.85
15.12
UJJIVAN
7188800
70.06
296.15
(11.87)
SRTRANSFIN
5169600
27.46
1100.65
2.18
JINDALSTEL
27550400
32.00
147.10
(10.71)
SRF
981500
22.99
3016.30
4.53
PVR
803200
25.27
1610.15
(6.24)
APOLLOTYRE
14622000
21.24
196.25
5.91
L&TFH
39672000
21.15
114.35
(5.18)
POWERGRID
30112000
17.50
200.55
3.03
INDIGO
2999400
18.01
1558.05
(5.65)
Weekly change in OI
2
Technical and Derivatives Review | June 21, 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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For Derivatives Queries
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