Technical and Derivatives Review | February 22, 2019
Some respite in the market, Metals and midcaps poised for extended moves
Sensex (35871) / Nifty (10792)
Source: Trading View
Future outlook
The latter half of the week brought back smile in traders’/ investors’ fraternity after undergoing some challenging period. First
couple of days extended previous week’s losses; however, the remaining part turned out to be savior for our market, courtesy to
strong cues from the global bourses. Although, the overall action in index was not that big, the broader end of the spectrum did
extremely well and hence, we not only defended key support but also managed to reclaim the 10800 mark.
Let’s dig into a bit of technical now. Tuesday’s session was quite crucial for our market. Despite taking a nosedive in the penultimate
hour, our markets somehow managed to defend the recent swing low of 10583.65 (low on January 29). The daily chart depicted an
‘Inverted Hammer’, which eventually got converted into a ‘Morning Star’ pattern due to a price development on the following day.
Since, there was an occurrence of a ‘Positive divergence’ on hourly chart (on Tuesday); markets had all the reason to give a decent
bounce back. This is what we saw in the remaining part of the week. Now going ahead, as long as 10580 is not broken, traders
should look to trade on the positive side. Before this, 10720 - 10646 would be seen as immediate supports. On the flipside, ‘200-day
SMA’ level of 10860 would be seen the level to watch out for. A move beyond this would trigger a decent up move towards 10920 -
11000 levels.
This week’s bounce back was initially propelled by the banking index and later on by IT and Auto. But the only outshining sector
throughout was the ‘Metal’ space. As we had anticipated, all constituents within this high beta pocket soared to a great extent. Also,
midcaps had shown some signs of revival; do watch out for this as well. All in all, set up looks good for the extended relief rally; but,
considering recent moves, it’s better to take one step at a time.
For Private Circulation Only
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Technical and Derivatives Review | February 22, 2019
Data indicates range bound action with stock specific momentum
Nifty spot closed at 10791.65 this week, against a close of 10724.40 last week. The Put-Call Ratio has increased from 1.30 to 1.37.
The annualized Cost of Carry is positive at 9.67%. The Open Interest of Nifty Futures has increased by 0.75%.
Derivatives View
Nifty current month future closed with a premium of 17.15 points against a premium of 22.15 points to its spot. Next month future
is trading with a premium of 55.75 points.
As far as Nifty options activities for the week are con cerned, we saw some build-up in 10800 and 10900 call options. On the other
side, 10600-10800 put options witnessed OI addition. Maximum open interest for February series now stands at 11000 call and
10700 put options.
Last week, the benchmark index pulled back higher from the support zone of 10550-10600. In this upmove, we hardly witnessed any
changes in OI in Nifty, but decent unwinding was seen in the BankNifty which indicates short covering. In options segment, 10700
and 10800 put options witnessed additions wherein 10700 call now has the highest OI. On the flipside, 10800 and 10900 call options
saw some addition of OI. Looking at this data, 10700 seems to be a support for the expiry week; whereas the index could consolidate
between 10800-10900. The broader markets have shown good momentum which we expect to continue in the expiry week as well.
Hence, traders are advised to focus on stock specific movement and trade with a positive bias.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
DISHTV
77104000
38.24
37.35
13.01
KSCL
1867500
17.34
402.45
(15.96)
IRB
8896000
36.74
130.25
7.29
TCS
15723250
17.43
1927.55
(5.45)
ALBK
34372000
19.69
43.15
15.37
KOTAKBANK
15981600
81.68
1240.65
(3.59)
RAMCOCEM
908000
18.35
639.05
5.06
DIVISLAB
3586000
10.52
1571.20
(3.37)
BPCL
10886400
16.89
344.55
8.78
ARVIND
8208000
23.39
75.30
(3.34)
Weekly change in OI
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Technical and Derivatives Review | February 22, 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
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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