1
For Private Circulation Only
Technical and Derivatives Review
| October 23, 2020
Some tentativeness around 12000, but odds in favor of bulls
Sensex (40686) / Nifty (11930)
Source: Trading View
Future outlook
All global markets had a mid-week hiccup in the previous week and we too reacted to it in the form of a decent single day correction
on Thursday i.e. 15th October. Fortunately, the major support zone of 11650- 11600 was defended successfully on the subsequent
day. The follow up of the same was witnessed this Monday as our markets kick started the week on a cheerful note. Although we
could reclaim 12000 this week, the momentum was clearly lacking as the benchmark once again looked a bit tentative around this.
For index specific traders, it was clearly a dull week as we witnessed a lot of choppy trades with no clear direction. Eventually, the
Nifty concluded the week with more than a percent gains as compared to the previous week close.
Now, let’s dig into a bit of technicals and understand why 11650 11600 is considered to be a strong as well as crucial support zone.
If we connect all major highs from record highs in a descending order, the trend line / pull back support comes around this level,
which coincides with the 20-day EMA as well. Hence, as long as this support is not violated, one should adopt a buy on dips strategy.
A close below 11650 11600 would result in a short term trend reversal and hence, traders should start lightening up positions after
it. Before this, intermediate supports are at 11820 11775. Now, we are tad below 12000 and if we have to pre-empt any direction,
we expect the Nifty to surpass 12000 – 12050 levels in coming days to head towards 12200 – 12400.
If we are anticipating this to happen then there has to be some technical evidences to back this hypothesis and they are as follows:
1) The ‘RSI-Smoothened’ for Nifty on weekly time frame chart has started moving northwards after entering a bullish territory above
the 70 mark, which is likely to provide impetus, 2) After a long underperformance, banking started to show inherent strength and as
we all know when financial starts participating in any rally; it is to be considered the robust one. To add to our conviction, the ‘ADX
14’ indicator on the daily chart is moving northwards after surpassing the 25 mark. This development generally unfolds a big trended
move, 3) The undercurrent is strong and we are seeing different sectors participating one after another and the way midcap index is
poised, another percent up move from hereon would confirm a strong breakout in ‘Nifty MIDCAP 50’ index. So, considering all this,
odds are very much in favor of the bulls. But since we are approaching a mega global event (US Presidential election), we may see
some volatility increasing and hence, keep a regular tab of all above mentioned levels.
2
For Private Circulation Only
Technical and Derivatives Review
| October 23, 2020
Fresh longs despite choppy move
Nifty spot closed at 11930.35 this week, against a close of 11762.45 last week. The Put-Call Ratio has increased from 1.31 to 1.47.
The annualized Cost of Carry is positive at 2.04%. The Open Interest of Nifty Futures has increased by 7.31%.
Derivatives View
Nifty current month future closed with a premium of 4.00 points against a premium of 2.70 points to its spot. Next month future is
trading at a premium of 28.30 points.
As far as Nifty options activities are concerned, 11900-12500 call options added fresh position; wherein, 12200 and 12500 calls
added huge positions. On the flip side, we saw decent writing in 11800 and 11900 put strikes. Maximum open interest for the
monthly series is placed at 12500 call and 11500 put options.
We started-off the week on a cheerful note and saw follow-up buying to reclaim 12000 mark. However, buying interest was missing
at the higher levels and hence we saw index consolidating in the range of 250 points. Eventually, week concluded on a positive note
along with addition of fresh longs. The banking index once again outperformed the benchmark index and concluded the week with
the gains of 4%. Stronger hands preferred adding few shorts; however, the quantum remained insignificant. At present, 11750-
12050 is the immediate trading range and any move beyond these levels may bring back the directional move.
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
BRITANNIA 1818200 83.92 3474.80 (7.58)
UPL
17655300
30.69
452.20
(3.50)
HEROMOTOCO
2670000
23.96
3111.75
(6.75)
CIPLA
15288000
21.15
759.40
(2.96)
SBILIFE
6361500
19.15
772.90
(3.62)
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
M&MFIN 23009364 48.07 135.15 7.35
AMARAJABAT
1429000
32.31
763.35
5.31
APOLLOTYRE
11755000
22.77
149.90
16.56
TATASTEEL
29391300
19.27
424.40
7.42
L&TFH
31613200
18.81
65.00
5.78
3
For Private Circulation Only
Technical and Derivatives Review
| October 23, 2020
Research Team Tel: 022 - 39357600 (Extn – 6844) Website: www.angelbroking.com
For Technical Queries E-mail: [email protected]
For Derivative Queries E-mail: [email protected]
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay
Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL and
Portfolio Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking
Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration
number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for
accessing /dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed
public offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make
such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies
referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits
and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in
connection with the use of this information.
Te
chnical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]ng.com
Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jai[email protected].com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]ng.com
Sneha Seth Derivatives Analyst [email protected]gelbroking.com