January 24, 2015
Technical Picks |
Bulls march further amid favorable global cues
Sensex (29279) / Nifty (8836)
Despite unfavorable cues from leading Asian bourses, our
Exhibit 1: Nifty Weekly chart
benchmark index (Nifty) opened marginally higher on Monday
and then moved sideways, thereby conserving its early morning
lead. On Tuesday too, we witnessed a gap up opening with a
marginal difference to the previous day's opening in terms of
gains. However, the Nifty extended its gains post the midsession,
unlike in the previous session, and eventually posted a strong
closing at a new all time high. The remaining sessions of the
week too traded with a positive bias, supported by favorable
global cues, thus enabling the Nifty to register new highs every
session. The Nifty ended the week well above the psychological
Source: Falcon
mark of 8800. On the sectoral front, the Banking, Capital
Exhibit 2: Nifty Daily chart
Goods, Healthcare and Auto counters were the major
contributors to the broader market's rally during the week;
whereas FMCG was the only sector to close marginally in the
negative territory. The Nifty ended the week with a massive
gain of 3.78% over the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27367 / 8219 and 23916 / 7163 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
Source: Falcon
28088 / 8476 and 27439 / 8240 levels, respectively.
The Nifty has now closed around the 127% reciprocal
Future outlook
retracement of the fall from 8626.95 to 7961.35. In addition,
On Monday, leading Asian indices - the Shanghai Composite
although, the current rally is quite steep in nature and
and the Hang Seng closed on a weak note. Despite this, positive
momentum oscillators are in overbought territory, it would be
cues from the US bourses underpinned gains in the rest of Asia,
very difficult to forecast an immediate reversal of the trend or a
including India. Right from the word 'Go', the Nifty continued
fall in the market. The main reason behind it is the ongoing
its outperformance over its peer global indices as all sessions
momentum and optimistic mood across the globe. Thus, the
during the week ended on a positive note. The 'Bearish Engulfing'
possibility of extending this up move towards 8950 - 9000
pattern on the Monthly chart and the possibility of forming 'Lower
cannot be ruled out. These levels coincide with the 161%
Top' on the weekly chart negated, once the Nifty moved beyond
reciprocal retracement as well as the higher end of the
the previous all time high of 8626.95. On Tuesday, the moment
'Megaphone' pattern on the weekly chart. We may have some
the Nifty surpassed this level and sustained above it for a few
volatility or profit booking in the market; but, it's not advisable
minutes, we observed a flurry of buying interest in the market.
to short until the confirmation of any trend reversal pattern. On
As a result, the Nifty soared by nearly a percent from that point
the lower side, 8700 - 8600 levels on the Nifty would now act
in no time to post a new high over the 8700 mark. The trend of
as a strong support for the Nifty. Due to the steep rally witnessed
posting new highs continued throughout the remaining week;
during the week, it's not advisable to trade in the Nifty on either
owing to positive cues from the global bourses before and after
side. Meanwhile, traders can continue to follow a stock centric
the European Central Bank (ECB) meet.
approach and trade with a proper exit strategy.
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January 24, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,750
28,515
28,962
29,726
30,173
NIFTY
8,410
8,623
8,745
8,958
9,079
BANKNIFTY
18,978
19,525
19,846
20,394
20,715
ACC
1,482
1,512
1,541
1,571
1,599
AMBUJACEM
233
243
248
258
263
ASIANPAINT
806
834
858
886
910
AXISBANK
493
529
553
589
614
BAJAJ-AUTO
2,320
2,381
2,436
2,497
2,552
BANKBARODA
210
217
223
229
235
BHEL
265
272
280
287
296
BPCL
627
651
667
691
706
BHARTIARTL
325
355
371
401
417
CAIRN
227
237
244
255
261
CIPLA
623
650
668
696
714
COALINDIA
364
379
390
405
416
DLF
136
146
152
162
168
DRREDDY
3,193
3,271
3,330
3,409
3,468
GAIL
404
413
430
439
456
GRASIM
3,560
3,677
3,759
3,876
3,958
HCLTECH
1,571
1,609
1,669
1,707
1,768
HDFCBANK
985
1,014
1,031
1,060
1,077
HDFC
1,107
1,199
1,270
1,361
1,433
HEROMOTOCO
2,737
2,800
2,860
2,923
2,983
HINDALCO
137
141
144
148
150
HINDUNILVR
846
906
937
997
1,028
ICICIBANK
345
358
367
380
389
IDFC
162
168
173
179
183
INDUSINDBK
807
832
848
873
889
INFY
2,048
2,131
2,178
2,262
2,309
ITC
333
341
357
365
381
JINDALSTEL
145
152
156
163
167
KOTAKBANK
1,343
1,364
1,391
1,413
1,440
LT
1,561
1,636
1,676
1,751
1,791
LUPIN
1,387
1,438
1,481
1,533
1,576
M&M
1,265
1,313
1,345
1,393
1,424
MARUTI
3,509
3,558
3,624
3,673
3,739
NMDC
132
136
139
142
145
NTPC
137
139
142
144
147
ONGC
338
343
350
355
362
POWERGRID
141
146
148
153
155
PNB
197
202
211
216
224
RELIANCE
833
860
886
913
938
SSLT
187
196
201
211
216
SBIN
304
316
324
336
344
SUNPHARMA
821
874
906
959
992
TCS
2,420
2,449
2,487
2,517
2,555
TATAMOTORS
500
544
568
612
636
TATAPOWER
78
83
87
93
96
TATASTEEL
367
385
399
417
430
TECHM
2,712
2,747
2,783
2,818
2,854
ULTRACEMCO
2,981
3,064
3,125
3,209
3,269
WIPRO
559
580
592
614
625
ZEEL
365
378
389
402
413
Technical Research Team
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January 24, 2015
Derivatives Review |
FIIs are pouring liquidity
Nifty spot closed at 8835.60 this week against a close of 8513.80 last week. The Put-Call Ratio has increased from 1.23 to 1.31
levels and the annualized Cost of Carry is positive at 6.06%. The Open Interest of Nifty Futures increased by 24.45%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 1.23 to 1.31 levels mainly due to
Implied Volatility (IV) for NIFTY has decreased from 14.85%.to
reasonable amount of open interest addition in put options last
12.88%. Historical volatility (HV) of NIFTY is at 20.20% and
week. We saw huge open interest addition in 8600-8800 put
that for BANKNIFTY is trading at 24.80%. Liquid counters
options which are long positions formed by FIIs to hedge their
having very high HV are HDIL, INDIACEM, IBREALEST,
Index Futures positions. On the other hand in call options decent
JPASSOCIAT and SUNTV. Stocks where HV are on lower side
buildup was seen in 8900 & 9000 call options, followed by
are BAJAJ-AUTO, MARUTI, INDUSINDBK, HDFCBANK and
unwinding in 8300-8700 call options. Maximum buildup has
LUPIN.
shifted from 8600 to 9000 call options and of put option still
remains at 8000 strike price.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 8.80 points
`2,25,587/- cr. to `2,54,327/- cr. Stock futures open interest
against the premium of 21.25 points to its spot. Next month
has increased from `63,289/- cr. to `68,980/- cr. Liquid
future is trading with premium of 62.95 points. Liquid counters
counters names which added significant positions last week
where CoC is high are JPPOWER, UNITECH, TATACHEM,
are HEROMOTOCO, ITC, TCS, ULTRACEMCO and HCLTECH.
INDIACEM and HDFCBANK. Stocks with negative CoC are
On the other hand unwinding was visible in counters like
IBULHSGFIN, NHPC, SRTRANSFIN, SAIL and TATAMOTORS.
TATASTEEL, BPCL, NMDC, LT and SSLT.
Derivative Strategy
Scrip
: BANKNIFTY
CMP : 20,119.30
Lot Size :
25
Exercise Date (F & O) :
29th. Jan 2015
View: Volatile
Strategy: Long Straddle
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
25
BANKNIFTY
20000
JAN
CE
150.00
19550
`225.00
BUY
25
BANKNIFTY
20000
JAN
PE
75.00
19725
`50.00
LBEP
-
19,775
UBEP
-
20,225
19900
(`125.00)
20075
(`150.00)
Max. Risk: `5,625/-
Max. Profit: Unlimited
If BANKNIFTY closes between LBEP and UBEP. If BANKNIFTY closes below LBEP or above UBEP on expiry.
20250
`25.00
NOTE: Profit can be booked before expiry if BANKNIFTY moves in favorable direction and time value decays.
20425
`200.00
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