Technical Picks | January 23, 2016
Trading bounce may extend further
Sensex (24436) / Nifty (7422)
Despite a sharp selloff on the US bourses on the previous
Exhibit 1: Nifty Weekly chart
weekend, the Nifty opened the proceedings for the week
with only a marginal downside gap, which was a bit of a
disappointment for the bears who had carried forward their
short positions over the week. The market traded in a
consolidation phase in the first half of Monday’s session but
the penultimate hour of trade saw the Nifty decline sharply,
leading to a close well below the 7400 mark. Tuesday was a
favorable session for the bulls as the Nifty managed to trim
a major portion of its previous day’s losses. The following
trading sessions were subject to massive volatility with our
market unable to isolate itself from uncertainty prevalent
Source: Company, Angel Research
across global markets. The Nifty first sneaked below the
psychological level of
7300 on a closing basis on
Exhibit 2: Nifty Daily chart
Wednesday. However, it surprised most of the participants
by opening with a decent upside gap on Thursday and then
posting a good 2% rally on Friday. Eventually, the Nifty
ended the week with a negligible loss of 0.21% over the
previous week’s closing.
Pattern formation:
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
25838
/
7837 and
25875 / 7822 levels, respectively.
Source: Company, Angel Research
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
24887
/
7555 and
An occurrence of this bullish pattern at the lower end of the
25797 / 7847 levels, respectively.
‘Falling Wedge’ pattern suggests towards at least a
temporary pause in the ongoing downtrend. Theoretically, a
Future outlook
sustainable move beyond previous week’s high of 7471 may
lead to a further bounce towards 7550 - 7600 levels on the
In the week gone by, markets across the globe were inflicted
Nifty. On the flipside, 7327 - 7241 are now being seen as
with high volatility, which rubbed-off on our market as well.
strong support levels. We had advised towards exiting short
The Nifty traded with a negative bias for a major part of the
positions on the Nifty and focusing on stock specific long
week and tested the psychological level of 7300. With the
ideas, which we believe should be a prudent strategy to
breach of this level, although by a small margin, we saw a
follow in the forthcoming week as well. Considering the
lot of pessimism across the broader market. We however
higher volatility levels prevalent in the market, traders are
held to our view that 7300 would continue to act as a strong
advised to be selective on their trades and follow a proper
support level for the Nifty and what followed was a good 2%
exit strategy to avoid losses.
rally on Friday, leading the Nifty to regain the 7400 mark on
a closing basis. All this price development has resulted in the
formation of a ‘Dragonfly Doji’ candlestick pattern on the
weekly chart.
For Private Circulation Only
1
Technical Picks | January 23, 2016
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
23,556
23,996
24,280
24,719
25,003
NIFTY
7,149
7,286
7,378
7,515
7,608
NIFTY BANK
14,455
14,976
15,276
15,797
16,097
ACC
1,183
1,212
1,234
1,263
1,286
ADANIPORTS
198
210
222
234
246
AMBUJACEM
180
187
192
198
203
ASIANPAINT
796
833
863
900
930
AXISBANK
345
385
406
446
467
BAJAJ-AUTO
2,190
2,254
2,295
2,359
2,400
BANKBARODA
113
122
127
135
140
BHEL
126
137
142
153
159
BPCL
822
853
896
927
970
BHARTIARTL
279
289
301
311
324
BOSCH
16,613
16,958
17,577
17,922
18,541
CAIRN
101
107
113
119
124
CIPLA
557
570
589
601
620
COALINDIA
266
283
303
320
340
DRREDDY
2,660
2,771
2,861
2,972
3,062
GAIL
312
340
356
384
400
GRASIM
3,349
3,398
3,484
3,533
3,619
HCLTECH
766
803
836
873
906
HDFC
949
989
1,049
1,090
1,149
HDFCBANK
1,082
1,120
1,159
1,197
1,236
HEROMOTOCO
2,301
2,446
2,523
2,668
2,744
HINDALCO
63
68
71
75
78
HINDUNILVR
736
754
788
806
840
ICICIBANK
211
222
228
239
246
IDEA
96
102
111
116
125
INDUSINDBK
815
857
908
950
1,001
INFY
1,093
1,115
1,138
1,160
1,184
ITC
293
301
310
318
328
KOTAKBANK
629
656
678
705
727
LT
1,043
1,093
1,119
1,168
1,195
LUPIN
1,656
1,689
1,712
1,744
1,767
M&M
1,064
1,132
1,168
1,236
1,272
MARUTI
3,669
3,887
4,088
4,306
4,507
NTPC
128
133
136
141
145
ONGC
200
208
214
222
227
POWERGRID
124
129
135
139
145
PNB
83
88
91
96
99
RELIANCE
914
959
1,022
1,067
1,129
SBIN
165
175
181
191
198
SUNPHARMA
745
767
786
808
827
TCS
2,214
2,255
2,278
2,319
2,343
TATAMOTORS
306
323
340
357
374
TATAPOWER
57
60
62
64
67
TATASTEEL
216
232
241
257
267
TECHM
492
503
515
526
538
ULTRACEMCO
2,516
2,615
2,677
2,776
2,838
VEDL
55
60
67
72
79
WIPRO
521
535
546
560
570
YESBANK
610
647
668
705
727
ZEEL
364
380
390
406
417
Technical Research Team
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2
Derivatives Review | January 23, 2016
Even after capitulation, volatility may still exist
Nifty spot closed at 7422.45 this week, against a close of 7437.80 last week. The Put-Call Ratio has increased from 0.82 to 0.86
levels and the annualized Cost of Carry is positive at 6.76%. The Open Interest of Nifty Futures decreased by 3.49%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.82 to 0.86 levels. In call
Implied Volatility (IV) for NIFTY has decreased from
options, 7300-7500 strikes added good amount of OI.
18.31% to 16.24%. Historical volatility (HV) of NIFTY is at
While in put options, 6800-7200 strikes added decent
20.60% and that for BANKNIFTY is at 28.22%. Liquid
build-up, followed by good amount of unwinding in 7500
counters having very high HV are MARUTI, COALINDIA,
& 7600 put options. Maximum buildup in current series has
MRF, M&MFIN and GLENMARK. Stocks where HV are on
shifted from 7700 to 7500 call options and of put options is
lower side are HCLTECH, GRASIM, INFY, WOCKPHARMA
intact at 7300 strike.
and FEDERALBNK.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 8.25
`2,44,942/- cr. to `2,56,957/- cr. Stock futures open
points against a premium of 8.45 points to its spot. Next
interest has decreased from `62,567/- cr. to `61,531/- cr.
month future is trading with premium of 20.65 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are COALINDIA,
week are ACC, BHARTIARTL, COALINDIA, NMDC and
POWERGRID, VEDL, AMBUJACEM and TATAPOWER.
CAIRN. On the other hand unwinding was visible in
Stocks with negative CoC are WIPRO, HCLTECH,
counters like ASIANPAINT, BPCL, DLF, HDFCBANK and
KOTAKBANK, ITC and TATASTEEL.
BHEL.
Derivative Strategy
Scrip: TCS
CMP : `2295.85
Lot Size : 200
Exercise Date (F & O) :
28th Jan 2016
View: Mildly Bullish
Strategy: Long Call
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
200
TCS
2300
JAN
CE
13.00
2250
(`13.00)
2275
(`13.00)
BEP - `2313.00
2300
(`13.00)
Max. Risk: `2,600
Max. Profit: Unlimited
If TCS closes on or below strike price on expiry.
If TCS continues to move above BEP.
2325
`12.00
2350
`37.00
NOTE: Profit can be booked before expiry if TCS moves in favorable directions.
2375
`62.00
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3
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E-mail: [email protected]
Website: www.angelbroking.com
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