Technical and Derivatives Review | September 21, 2018
Index at make or break levels
Sensex (36842 ) / Nifty (11143)
Source: Trading View
Future outlook
This has been clearly the worst week for our markets in last few months. We have been correcting right from the word go, started
on Monday and Friday was like adding insult to the injury. At one point on Friday, index and the broader market was falling like a
pack of cards; threatening market participants to a great extent. Fortunately, we did manage to give a decent recovery from lows
and have closed at the make or break level.
Now, if we have to analyze the index on weekly and Monthly chart, we can see index precisely testing key Fibonacci ratios and
thereby giving some ray of hope for the bulls. In addition, for Nifty, the daily close has come above the daily ‘89 EMA’, which is
another sigh of relief. But, if we look at the second major index, Bank Nifty, it does not give any encouraging sign at this point in
time. Hence, next week would be quite crucial for our markets to set a near term trend. For the coming week, 11210 followed by
11350 would be seen as immediate hurdles. If index has to gain some kind of strength, it should first take out these barriers
convincingly with an authority. On the other hand, if we fail to do so and again slide below 11050 - 11000, then it would certainly not
augur well as we may see a sharp slide once again to test lower levels.
Hence, as trader, our advice would be to stay light on positions and one has to be agile while picking up stocks at least for the
momentum perspective. Also, we need to highlight that we may see higher volatility going forward and hence, aggressive positions
should be strictly avoided.
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Technical and Derivatives Review | September 21, 2018
The fear index at 5-month high
Nifty spot closed at 11143.10 this week, against a close of 11515.20 last week. The Put-Call Ratio has decreased from 1.38 to 1.14
and the annualized Cost of Carry is positive at 12.69%. The Open Interest of Nifty Futures decreased by 7.52%.
Derivatives View
Nifty current month future closed with a premium of 23.25 points against a premium of 32.10 points to its spot. Next month future
is trading with a premium of 64.50 points.
As far as Nifty options activities for the week are concerned, we saw fresh build-up in 11200-11400 call options. On the flip side, we
hardly saw any relevant build-up in puts; however, decent unwinding took place in 11200- 11600 strikes. Maximum open interest for
September series is placed at 11500 followed by 11600 call and 11000 followed by 11200 put options.
It was indeed one of the worst weeks for our market, as the benchmark index tanked more than 3% on the closing basis. In index
futures segment, we saw decent long unwinding in the recent fall; however, the banking index added good amount of short
positions. Due to Friday’s fall, we saw some panic scenario in the market, resulting INDIAVIX surging above the hurdle of 16.
At current juncture, 10850 on the lower side and 11350 on the higher side are the important levels. Going ahead, unless we don’t see
any up move along with meaningful long positions; traders are advised avoiding any longs and shall rather focus on individual counters.
Long Formation
Short Formation
Chg (%)
Chg (%)
Chg (%)
Chg (%
Weekly change in OI
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Technical and Derivatives Review | September 21, 2018
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
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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