Technical Picks |
May 23, 2015
Nifty likely to face resistance around 8500
Sensex (27958) / Nifty (8459)
The bulls kicked off trading for the week on a cheerful note as
Exhibit 1: Nifty Weekly chart
the Nifty opened slightly higher on Monday over its previous
ResistanceZone
week's closing. The optimism was maintained throughout the
remaining part of the day. As a result, the Nifty added another
percent to the bull's kitty on Monday. All of the remaining trading
sessions of the week witnessed muted trading activity; but the
Nifty managed to move higher gently to close the week well
beyond the 8400 mark. On the sectoral front, IT and Healthcare
counters soared followed by Oil & Gas and Capital Goods
stocks; whereas, Metal was the only sector to close the week
Source: Falcon
marginally inside the negative territory. The Nifty ended the
Exhibit 2: Nifty Daily chart
concluded week with a decent gain of 2.38% over the previous
week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27937 / 8450 and 25297 / 7607 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
27574 / 8346 and 27929 / 8446 levels, respectively.
Future outlook
Source: Falcon
The Nifty extended its previous week's gains by maintaining its
positions in the ongoing bounce and should look for a shorting
upward bias throughout the week. The index has now reached
opportunity around the above mentioned resistance zone. A
a strong resistance zone of 8450 - 8500 (daily 89 EMA) and
possible immediate correction can be seen around 8300 - 8250
thus, we expect it to undergo a near term corrective phase.
levels. The stop loss for this trade set up can be kept at 8570,
During the last week of April 2015, the Nifty confirmed a 'Lower
which may negate the above mentioned hypothesis. The coming
Top Lower Bottom' formation on the weekly chart. This price
week may trade with enhanced volatility on account of May
development coincided with a breakdown from the 'Megaphone'
series derivative expiry on the NSE. Thus, traders are advised
as well as 'Head & Shoulder' pattern (please refer exhibit 1).
to trade with a proper exit strategy and avoid taking undue
Thus, the recent up move can be construed as a pull back of
risks.
the weekly downtrend. Thus, traders should remain light on
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Technical Picks |
May 23, 2015
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,099
27,528
27,800
28,229
28,501
NIFTY
8,189
8,324
8,407
8,542
8,624
BANKNIFTY
17,926
18,180
18,468
18,721
19,009
ACC
1,440
1,480
1,511
1,550
1,582
AMBUJACEM
229
235
240
246
251
ASIANPAINT
713
744
781
812
849
AXISBANK
547
558
567
578
587
BAJAJ-AUTO
2,040
2,174
2,257
2,391
2,475
BANKBARODA
148
152
158
161
167
BHEL
222
228
234
240
246
BPCL
757
770
783
796
809
BHARTIARTL
383
389
397
403
411
CAIRN
188
192
200
204
211
CIPLA
653
663
679
689
705
COALINDIA
353
364
370
381
387
DRREDDY
3,412
3,528
3,610
3,725
3,808
GAIL
373
385
392
404
412
GRASIM
3,457
3,549
3,623
3,715
3,789
HCLTECH
872
928
958
1,014
1,044
HDFCBANK
977
1,001
1,015
1,039
1,053
HDFC
1,203
1,246
1,269
1,312
1,335
HEROMOTOCO
2,467
2,535
2,575
2,643
2,683
HINDALCO
133
135
138
140
144
HINDUNILVR
825
845
857
876
888
ICICIBANK
306
310
315
319
325
IDEA
157
162
171
176
185
IDFC
150
152
155
158
161
INDUSINDBK
813
833
847
867
881
INFY
1,923
1,985
2,023
2,085
2,124
ITC
320
324
330
335
341
KOTAKBANK
1,307
1,347
1,375
1,415
1,443
LT
1,562
1,608
1,635
1,681
1,708
LUPIN
1,675
1,705
1,726
1,756
1,777
M&M
1,209
1,233
1,255
1,278
1,300
MARUTI
3,604
3,653
3,702
3,751
3,799
NMDC
126
128
131
133
136
NTPC
132
134
136
138
140
ONGC
310
316
321
327
332
POWERGRID
134
138
141
144
147
PNB
142
146
150
154
157
RELIANCE
854
879
897
922
940
SBIN
265
274
289
298
314
SUNPHARMA
920
962
985
1,027
1,051
TCS
2,449
2,534
2,581
2,666
2,713
TATAMOTORS
493
504
514
525
535
TATAPOWER
69
72
76
80
83
TATASTEEL
321
331
351
361
380
TECHM
583
625
647
689
711
ULTRACEMCO
2,626
2,801
2,955
3,130
3,285
VEDANTA
196
201
210
216
225
WIPRO
523
542
554
573
585
YESBANK
832
849
861
879
890
ZEEL
291
305
314
329
338
Technical Research Team
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Derivatives Review |
May 23, 2015
Market near to strong resistance of 8500
Nifty spot closed at 8458.95 this week against a close of 8262.35 last week. The Put-Call Ratio has increased from 0.96 to 1.11 levels
and the annualized Cost of Carry is negative at 4.96%. The Open Interest of Nifty Futures increased by 6.64%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 0.96 to 0.11 levels mainly due to
Implied Volatility (IV) for NIFTY has decreased from 18.99%.to
open interest addition in put options. Huge buildup was visible
13.16%. Historical volatility (HV) of NIFTY is at 22.10% and
in 8300-8400 put options last week which are long formation
that for BANKNIFTY is trading at 30.24%. Liquid counters having
in the hopes market to weaken from current levels. On the
very high HV are JISLJALEQS, VOLTAS, BAJAJ-AUTO,
other hand in call options we hardly saw any buildup, unwinding
APOLLOTYRE and MCLEODRUSS. Stocks where HV are on lower
was visible in 8200-8400 call options. Maximum buildup in
side are JUBLFOOD, PNB, ABIRLANUVO, UCOBANK and
current series is seen in 8500 call & 8300 put options.
HAVELLS.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a discount of 6.90 points
`2,16,429/- cr. to `2,35,108/- cr. Stock futures open interest
against the discount of 1.15 points to its spot. Next month future
has increased from `58,750/- cr. to `64,100/- cr. Liquid
is trading with premium of 17.55 points. Liquid counters where
counters names which added significant positions last week
CoC is high are ULTRACEMCO, CIPLA, NMDC, LUPIN and
are HEROMOTOCO, SBIN, ULTRACEMCO, BANKBARODA and
MARUTI. Stocks with negative CoC are PNB, SBIN,
ZEEL. On the other hand unwinding was visible in counters like
INDUSINDBK, GAIL and KOTAKBANK.
WIPRO, INDUSINDBK, LT, INFY and HINDUNILVR.
Derivative Strategy
Scrip : ICICIBANK
CMP : `313.55
Lot Size : 1250
Exercise Date (F & O) :
28th. May 2015
View: Mildly Bearish
Strategy: Long Put
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
1250
ICICIBANK
310
MAY
PE
2.00
285
`23.00
BEP
-
`308/-
292
`16.00
299
`9.00
Max. Risk: `2,500/-
Max. Profit: Unlimited
If ICICIBANK closes on or above strike price on expiry.
If ICICIBANK continues to move below BEP
306
`2.00
313
(`2.00)
NOTE: Profit can be booked before expiry if ICICIBANK moves in favorable direction and time value decays.
320
(`2.00)
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