Technical Picks | October 22, 2016
Markets to be cautious on 8745 level
Sensex (28077) / Nifty (8693)
The Nifty index started the proceeding of the week with
Exhibit 1: Nifty Weekly chart
marginal gains on Monday. However, the bearish
momentum of previous week continued; the index started
correcting from the initial trades and ended with a loss of
three quarter of a percent. On Tuesday, the index opened
with some gains and rallied sharply adding another 2% to
the bull’s kitty. Thereafter, the index traded in a narrow
range for the remaining part of the week with a little positive
bias. Finally, due to strong upward move in banking and IT
conglomerates, the week ended with the Nifty adding 1.28%
over its previous week’s close.
Key Moving Averages:
Source: Company, Angel Research
The ’89-day EMA’ and the ’89-week EMA’ for the
Exhibit 2: Nifty Daily chart
Sensex/Nifty are placed at
27704
/
8538 and
26431 / 8065 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
28078
/
8684 and
27676 / 8527 levels, respectively.
Future outlook
The week’s trading started on expected lines witnessing the
index forming a large bearish candle on Monday’s session.
As a result, the index breached the neckline of the ‘Head &
Shoulders’ pattern, which we had mentioned in our last
week’s outlook. However, inspite of posting a bit lower than
Source: Company, Angel Research
the support zone of 8540 - 8518, the index pulled back
In case of failure to cross the resistance, it would lead to
higher in the remaining part of the week. The velocity of the
another leg of corrective move towards 8630 and 8540.
pullback move was quite unexpected as certain index
However, a firm close above 8745 would negate our recent
heavy-weights and midcaps showed decent upward move. If
cautious stance on the market and then it would compel us
we closely observe the daily chart, inspite of the recent rally,
to reassess the situation in order to provide a near term
the ‘Lower Top Lower Bottom’ structure is still intact. The
outlook.
recent ‘Swing High’, the ‘Falling Trendline Resistance’
formed by joining the recent lower tops, and the ‘Parabolic
SAR’ on daily charts coincide near 8745 and thus, the
mentioned level is a key resistance for the index. Hence,
unless the index closes above the mentioned resistance, we
would continue to advise traders to wait on sidelines.
For Private Circulation Only
1
Technical Picks | October 22, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,926
28,002
28,107
28,183
28,288
NIFTY
8,420
8,554
8,641
8,775
8,861
NIFTY BANK
18,752
19,233
19,483
19,963
20,213
ACC
1,476
1,514
1,579
1,617
1,682
ADANIPORTS
236
261
275
300
313
AMBUJACEM
238
242
249
253
260
ASIANPAINT
1,104
1,127
1,168
1,191
1,232
AUROPHARMA
788
804
822
839
857
AXISBANK
502
515
530
543
558
BAJAJ-AUTO
2,702
2,751
2,793
2,842
2,884
BANKBARODA
146
151
155
160
163
BHEL
125
133
138
147
152
BPCL
634
651
663
680
692
BHARTIARTL
290
300
306
315
321
INFRATEL
343
354
362
373
381
BOSCH
21,707
22,173
22,527
22,993
23,346
CIPLA
554
568
584
598
615
COALINDIA
306
310
313
316
320
DRREDDY
2,959
3,036
3,090
3,167
3,221
EICHERMOT
24,078
24,604
25,091
25,617
26,104
GAIL
414
427
438
451
462
GRASIM
947
960
980
992
1,012
HCLTECH
782
807
828
853
874
HDFCBANK
1,219
1,246
1,259
1,286
1,300
HDFC
1,263
1,299
1,334
1,370
1,404
HEROMOTOCO
3,251
3,305
3,398
3,452
3,544
HINDALCO
146
149
153
156
159
HINDUNILVR
828
839
848
859
868
ICICIBANK
233
255
268
290
302
IDEA
68
74
77
83
87
INDUSINDBK
1,191
1,208
1,217
1,233
1,242
INFY
994
1,016
1,028
1,050
1,063
ITC
233
237
242
245
250
KOTAKBANK
756
768
777
789
798
LT
1,415
1,461
1,488
1,534
1,561
LUPIN
1,408
1,453
1,487
1,532
1,566
M&M
1,279
1,303
1,332
1,356
1,384
MARUTI
5,515
5,580
5,639
5,704
5,764
NTPC
144
147
149
151
153
ONGC
270
275
279
283
287
POWERGRID
172
174
178
180
183
RELIANCE
1,034
1,048
1,073
1,088
1,113
SBIN
248
253
257
262
266
SUNPHARMA
719
733
746
760
773
TCS
2,316
2,371
2,399
2,454
2,483
TATAMTRDVR
349
352
359
363
369
TATAMOTORS
532
538
548
555
564
TATAPOWER
75
79
81
85
87
TATASTEEL
398
413
422
437
447
TECHM
394
414
425
445
456
ULTRACEMCO
3,877
3,928
4,002
4,053
4,126
WIPRO
461
480
491
510
520
YESBANK
1,214
1,266
1,295
1,348
1,376
ZEEL
484
504
517
537
551
Technical Research Team
For Private Circulation Only
2
Derivatives Review | October 22, 2016
FIIs added some short positions in November series
Nifty spot closed at 8693.05 this week, against a close of 8583.40 last week. The Put-Call Ratio has increased from 0.93 to 1.00
levels and the annualized Cost of Carry is positive at 5.11%. The Open Interest of Nifty Futures increased by 4.50%.
Derivatives View
Weekly OI gainers
OI
OI
Price
Scrip
Price
Nifty current month future closed with a premium of 7.30
Futures
Chg (%)
Chg (%)
points against a premium of 21.70 points to its spot. Next
HAVELLS
5016000
61.70
412.90
(6.97)
month future is trading with a premium of 49.00 points.
TORNTPOWER
2028000
56.48
175.25
0.72
PCR-OI has increased from 0.93 to
1.00 levels. In call
HINDZINC
9312000
42.79
250.20
1.42
options, we hardly saw any meaningful activity in terms of
NCC
31440000
42.08
92.60
11.50
open interest. While in put options, 8600-8700 strikes were
ZEEL
11156600
36.50
522.90
(1.48)
active and they also added good amount of positions. We
believe, FIIs have formed short positions in these put options,
TORNTPHARM
401600
36.41
1585.55
(3.38)
expecting Nifty to close above 8600 levels. Highest open
ARVIND
6040000
31.71
351.10
0.43
interest in October series remains intact at 9000 call and
MINDTREE
3768000
29.93
479.80
(4.71)
8500 put options.
Stock that added longs last week are ADANIPORTS, NCC,
IDBI, JISLJALEQS and EXIDEIND. While, fresh shorts were
Weekly OI losers
visible in HAVELLS, ACC, MINDTREE, ASIANPAINT and MRF.
OI
OI
Price
Scrip
Price
Liquid counters with higher CoC are IDEA, RELIANCE,
Futures
Chg (%)
Chg (%)
GRASIM, TATAMOTORS and WIPRO. Stocks with negative
COLPAL
1945300
(18.10)
957.55
3.60
CoC are KTKBANK, HCLTECH, TCS, ACC and BANKINDIA.
GAIL
6253500
(16.25)
440.85
2.19
After huge amount of long unwinding in Index Futures; last
BHEL
42710000
(15.60)
142.00
6.37
week, we witness fresh short formation in Index by FIIs. We
ICICIBANK
63975000
(13.29)
278.00
14.45
believe, these short are mainly formed in November. We also
HDFC
10910500
(9.43)
1339.95
1.35
witness decent amount of writing in 8600 put option, which
suggests market may take support near 8600 levels for current
RELINFRA
11861200
(6.98)
576.60
0.75
series. Thus, looking at the above data, we would suggest
INFY
12923000
(6.92)
1037.95
1.88
traders to avoid forming any aggressive directional trade in
CEATLTD
1368500
(6.86)
1319.10
(4.37)
Nifty for October expiry.
Weekly change in OI
20,000
Call
Put
15,000
10,000
5,000
0
(5,000)
(10,000)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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