For Private Circulation Only
Technical and Derivatives Review
| November 21, 2020
Some breather at 13000, real action in broader market
Sensex (43882) / Nifty (12859)
Source: Trading View
Future outlook
After an extended weekend post the Diwali festival, markets started off higher and clocked a fresh record high of 12963
during the week. Since there was no major follow up buying seen in major heavyweight constituents, Nifty was unable to
show the 13000 mark on the screen. In fact, some profit booking was witnessed in the last couple of sessions to eventually
conclude the week with nominal gains of six tenths of a percent.
In the previous couple of weeks, markets have already taken a giant leap and mostly all the major positive factors are already
priced in; markets had no fresh trigger to continue the similar kind of pace. We still do not rule out the possibility of
immediate levels of 13100 - 13200, but the rally may not be that smooth now. The overall trend still remains strongly bullish
and we continue with our ‘Buy on declines’ strategy but in between, we are likely to see some profit taking. For the
forthcoming week, Friday’s low of 12730 will now be seen as key support. A move below this will extend the corrective move
towards 12600 - 12450 levels; whereas on the higher side, 12963 is the level to watch out for.
In our intra-week commentary, we had mentioned how the banking index is showing some signs of being overbought and very
much on expected lines, we witnessed nearly 1200 points correction in the last couple of days. Fortunately due to the late
surge in banking conglomerates, Bank Nifty closed very much in safer territory above 29200. But the real action continued in
the broader markets and hence, we can still focus on the same. Traders are advised not to trade aggressively now and should
continue with a stock centric approach.
For Private Circulation Only
Technical and Derivatives Review
| November 21, 2020
Some consolidation ahead of expiry
Nifty spot closed at 12859.05 this week, against a close of 12719.95 last week. The Put-Call Ratio has increased from 1.53 to 1.57.
The annualized Cost of Carry is positive at 5.80%. The Open Interest of Nifty Futures has increased by 3.04%.
Derivatives View
Nifty current month future closed with a premium of 12.25 points against a premium of 33.45 points to its spot. Next month future
is trading at a premium of 36.05 points.
As far as Nifty options activities are concerned, 13000-13200 call options added fresh positions; whereas open interest addition was
also seen in 12800-12700 put options. Maximum open interest for the November series is placed at 13000 call and 12000 put
options. The 12800 put option also has decent amount of open interest outstanding.
We started the truncated week on a positive note and registered another record high, however, the index resisted around the 13000
mark and consolidated to end the week with gains of over half a percent. The BankNifty index witnessed some profit booking during
the week and the open interest declined by 10 percent. FII’s continued to buy equities in the cash segment and they were buyers in
the index futures segment too. Looking at the options data concentration, we expect the index to trade within a broad range of
12700-13000 till expiry. However, the data from the stronger hands continues to be positive and thus, the index should surpass the
13000 mark soon. Hence, traders are advised to avoid taking contra calls and adopt a buy-on-dip strategy.
Weekly change in OI
Short Formation
Chg (%)
BPCL 23895000 23.14 383.75 (3.01)
Long Formation
Chg (%)
COFORGE 751500 27.81 2361.30 2.14
For Private Circulation Only
Technical and Derivatives Review
| November 21, 2020
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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