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Technical and Derivatives Review | November 22, 2019
For Private Circulation Only
The wait continues for record highs
Sensex (40359) / Nifty (11914)
Source: Trading View
Future outlook
Markets were a bit joyful at the opening of the week gone by and in-line with this, Nifty continued its march beyond 12000 during the mid-
week. However, once again, benchmark index looked a bit tentative at higher levels and in last couple of days, this tentativeness resulted
into a decline towards the 11900 mark. Eventually, third consecutive week ended on a flat note with nominal gains of nearly two tenths of
percent to the previous weekly close.
Due to recent price action, the weekly chart now depicts three back to back Doji’ candles. This indicates some indecision at a crucial
juncture but no means we are interpreting it as a sign of caution. It seems that the market is now awaiting some trigger to clock fresh
record highs. Meanwhile, the range is confined to merely 200 points on weekly basis. Only a decisive breakout outside this range would
trigger some momentum in the market. In our sense, 11880 – 11800 would be seen as immediate base and it’s a matter of time, we would
break through this sturdy wall of 12050 – 12100 to enter an uncharted territory.
With reference to our recent articles, although benchmark index is trapped in a range, lot of individual themes are doing well since last few
days. This week, stocks from infrastructure space were kept buzzing along with ‘Pharma’ stocks which appears to have come out of the
slumber. Do watch out for such potential themes which are likely to provide better trading opportunities.
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Technical and Derivatives Review | November 22, 2019
For Private Circulation Only
Pharma coming out of a slumber; poised for a strong rally
Nifty Pharma (8067)
Source: Trading View
The Pharma’ sector enjoyed a strong bull run in the period of 2012 2015 but since then this once a favourite pocket for many, went
completely out of flavour. Barring handful of names, many stocks within this space in last few years had to undergo massive price wise as
well as time wise correction. During the month of October 2019, the Nifty Pharma index had registered a low tad above the 7000 mark
and has seen some consolidation since then. As per the Fibonacci Time Retracement Theory, October 2019 was the probable month of
trend reversal for the Nifty Pharma index and in line with this observation, we did see the index showing early signs of revival.
Now, if we look at the recent price action, the Nifty Pharma index first turned the trend from down to sideways and thus, we had seen a
consolidation phase in last one month. This consolidation has set a support base for the index and now finally the stocks within the sector
have started witnessing up moves with an increase in volumes, thus indicating probability of a turnaround in this sector after its long
underperformance. On the daily chart, the Nifty Pharma index has now given a breakout above an 'Inverted Head & Shoulders' pattern
which is a positive sign. Technically, such pattern leads to an up move in short to medium term and thus, we are quite optimistic on this
sector and expect stocks within this space to give decent returns in the near term. As far as levels are concerned, the Nifty Pharma index is
first expected to rally towards its '200 SMA' which is placed around 8350, followed by an up move towards 8650-8700 in next few months.
Thus traders are advised to look for stock specific opportunities within this space from a short as well as medium term perspective.
Amongst stock specific names, Lupin, Divis Lab, Sunpharma, Dr.Reddy are few of the marquee names which could take leadership to drive
the Pharma index towards the mentioned target areas.
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Technical and Derivatives Review | November 22, 2019
For Private Circulation Only
No meaningful change in F&O date, stay long
Nifty spot closed at 11914.40 this week, against a close of 11895.45 last week. The Put-Call Ratio has decreased from 1.39 to 1.31.
The annualized Cost of Carry is positive at 0.04%. The Open Interest of Nifty Futures has decreased by 8.04%.
Derivatives View
Nifty current month future closed with a premium of 0.10 points against a premium of 47.15 points to its spot. Next month future is
trading with a premium of 43.05 points.
As far as Nifty options activities for the week are concerned, the build-up was scattered between 11900-12100 call options. On the
flip side, 11900 and 11900 put options. Maximum open interest for the monthly series now stands at 12000 call and 11400 put
option.
We had a cheerful start for the week and the follow-up buying brought index tad above the psychological mark of 12000.However,
since the last three consecutive sessions, we witnessed decent profit booking around this mark to eventually conclude the week tad
below 11950. As far as open interest activities in index futures are concerned, traders preferred unwinding few of their positions in
Nifty; whereas, BankNifty added some fresh positions. At present, 11850-11900 is an immediate support zone and the hurdle is
placed around 12000-12050. Considering the overall positions, we don’t see any sign of concern in the market and we soon expect
Nifty to rally beyond the above-mentioned hurdle.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
ZEEL 47259000 50.89 352.75 21.89
DISHTV 121186900 29.08 16.05 17.15
MFSL 7098300 26.96 507.30 6.11
EQUITAS 12388100 20.22 90.90 5.64
IBULHSGFIN 34169600 14.54 235.95 17.15
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
SIEMENS 2803350 40.14 1491.85 (5.19)
CESC 1300800 32.95 746.45 (1.29)
TORNTPHARM 407000 30.87 1715.30 (4.11)
CONCOR 7938477 23.79 558.85 (2.45)
ONGC 25601400 20.20 133.85 (1.51)
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Technical and Derivatives Review | November 22, 2019
For Private Circulation Only
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearch-cso@angelbroking.com
For Derivatives Queries E-mail: derivatives.de[email protected]angelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.c[email protected]ngelbroking.com
Ruchit Jain Technical Analyst ruchi[email protected]broking.com
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com
Sneha Seth Derivatives Analyst sneha.set[email protected]lbroking.com