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For Private Circulation Only
Technical and Derivatives Review |June 23, 2023
Bulls hesitate to reach new highs, retreat to 18650 levels
Sensex (62979) / Nifty (18666)
Source: Tradingview.com
Future outlook
The Indian stock market had a promising start to the week, with the possibility of Nifty reaching a new high. However, profit booking
occurred on the same day and continued until the first half of Tuesday, causing a retest of levels around 18650. Taking advantage of
this, the bullish camp initiated strong buying, driving prices higher in an attempt to achieve new highs on Wednesday and Thursday.
However, another failed attempt led to profit booking and a drop in prices back to Tuesday's low. As a result, the week ended with a
loss of 0.85%, just above the 18650 level.
It was a disappointing week for the Bulls as they were unable to push prices to new highs despite multiple attempts. From a
technical standpoint, there is a clear hurdle formed around the 18880 levels, accompanied by a bearish gap seen on the daily chart
after a long time. The bullish momentum has diminished in the short term, and prices have closed just above a crucial support level.
Also, Prices ended slightly above the 20EMA, which has previously acted as a strong barrier against any corrections. This level
coincides with a trigger point of "BEARISH DOUBLE TOP" pattern observed on the hourly chart. In our opinion, for the bulls to regain
control, the upward movement should start from the current levels. However, if the levels of 18600-18650 are breached, then we
might witness further price correction toward the 18500-18450 levels. On the other hand, the bearish gap around 18750 will now
act as immediate resistance, followed by the all-time high level at 18888. Having said that, traders should note that the higher time
frame charts continue to look intriguing and suggesting that any future price or time-wise correction should be seen as a buying
opportunity for those who missed the upward trend in the past few months.
Although there were no significant changes in the key indices, the Nifty Midcap, which had been performing well recently,
experienced a sharp correction in the last two days. Volatility within this space is expected to continue to rise. Therefore, traders
should be selective in their stock choices and focus on frontline counters, which are considered safer bets in such a scenario.
Additionally, attention should be paid to the banking sector, as it has been oscillating within a range for over a month and is now at
an interesting juncture where a strong movement in either direction can be anticipated in the near term.
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Technical and Derivatives Review |June 23, 2023
Sho
rt
Form
at
ion
Long Short Ratio marginally corrected to 53%
Nifty spot closed at 18665.50 this week, against a close of 18826 last week. The Put-Call Ratio has decreased from 1.29 to 0.93 on
Weekly basis. The annualized Cost of Carry is positive at 13.17%. The Open Interest of Nifty Futures decreased by 5.21%.
Derivatives View
Nifty current month’s future closed with a premium of 40.40 against a premium of 73.15 points to its spot in the previous week.
Next month’s future is trading at a premium of 131.60 points.
The benchmark index witnessed some vigorous attempts to clock new highs in the previous week but failed to do so, and by the
weekend, the Nifty50 index corrected 0.85 percent to close at a critical support level. On the derivatives front, Nifty witnessed a long
unwinding on a weekly basis, whereas Bank Nifty had an insignificant change and remained in its slumber phase. On the options
front, piling positions of put writers can be seen from 18700-18500 strikes, indicating a downward shift in the support base. While
on the flip side, 18700-18800 had significant piling on the front of the call writing, showcasing a stiff nearby resistance for Nifty. Also,
there have not been any substantial changes on the ‘Long Short Ratio’ front, as it marginally corrected to 53% from 55% on a WoW
basis. Considering the mentioned data, we expect some consolidation in the near period, and one should remain fussy with their
stock selection till we do not see clarity in the trend.
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
RBLBANK 63620000 28.71 166.20 (4.51)
ADANIENT 12579850 21.86 2235.30 (11.08)
PVRINOX 4131457 18.01 1381.40 (4.98)
IDEA 694610000 16.40 7.50 (4.46)
VOLTAS 11334000 14.44 748.35 (6.44)
Weekly change in OI
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
SHRIRAMFIN 7932000 64.92 1675.90 19.00
PEL 10957050 27.28 883.80 12.44
HDFCAMC 4759500 25.71 2009.55 5.47
ICICIPRULI 13714500 18.22 557.90 4.22
MFSL 5659000 9.95 747.90 7.80
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Technical and Derivatives Review |June 23, 2023
Sameet Chavan Head Research – Technical & Derivatives sameet.chavan@angelone.in
Sneha Seth Senior Analyst – Technical & Derivatives sneha.seth@angelone.in
Rajesh Bhosale Analyst – Technical rajesh.bhosle@angelone.in
Osho Krishan Senior Analyst – Technical & Derivatives osho.krishan@angelone.in
Hitesh Rathi Analyst – Technical & Derivatives hitesh.rathi@angelone.in
Research Team Tel: 022 - 39357600 Website: www.angelone.in
For Technical Queries E-mail: technicalresearch-cso@angelone.in
For Derivative Queries E-mail: derivatives.desk@angelone.in
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Technical and Derivatives Review |June 23, 2023
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