Technical Picks | December 24, 2016
Tail end of corrective phase, a good opportunity for stock specific buying
Sensex (26041) / Nifty (7986)
The Nifty index started trading for the week on a negative
Exhibit 1: Nifty Weekly chart
note and got corrected on the same day. However, it
continued to trade lower at a snail’s pace till Wednesday.
Continuing the bearish momentum, Nifty broke the support
of 8056.85 (21st November low) with a gap down opening
on Thursday and ended the day below the 8000 mark. On
Friday, the index traded range-bound and ended on a flat
note. All these actions, during the week, led the index to
close down by 1.89 percent over its previous week’s close.
Key Moving Averages:
The ’89-day EMA’ and the ’89-week EMA’ for the
Source: Company, Angel Research
Sensex/Nifty are placed at
27060
/
8334 and
26478 / 8092 levels, respectively.
Exhibit 2: Nifty Daily chart
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
26447
/
8128 and
27008 / 8326 levels, respectively.
Future outlook
During the week, Nifty sneaked below the crucial support of
8056.85, which was the 'Higher Bottom' on the daily chart
registered on 21st November. The breach of the support
indicates Nifty’s continuation with the corrective/
consolidation phase. However, if we meticulously analyze
Nifty's price movement with the 'RSI Smoothened' index, it is
Source: Company, Angel Research
observed that the momentum oscillator had registered low of
Such tail end corrections should be used as opportunities to
9.19 during the previous corrective move, when the index
time delivery based buying rather than creating short
registered low of 7917.29 on 21st November. While the
positions. Thus, we advise traders to look for stock specific
index has closed marginally above the 21st November's
opportunities for delivery based buying at current juncture
closing, the 'RSI Smoothened' oscillator is trading significantly
and wait for fresh signs to trade in the index. The major
higher at 25.76. In the coming week, the index has crucial
resistance for the index in the coming week is seen around
support around 7917 (recent low) and could correct upto
8130.
7821 (127% reciprocal retracement of the recent upmove)
only on the breach of this low. Given the placement of the
'RSI Smoothened' oscillator mentioned above, there is high
probability of a positive divergence formation, which is
usually seen during the tail end of the corrective moves.
For Private Circulation Only
1
Technical Picks | December 24, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
25,506
25,774
26,140
26,407
26,773
NIFTY
7,830
7,908
8,020
8,098
8,211
NIFTY BANK
17,510
17,697
18,007
18,194
18,504
ACC
1,249
1,273
1,293
1,317
1,338
ADANIPORTS
246
254
268
276
290
AMBUJACEM
194
197
201
205
209
ASIANPAINT
825
849
876
900
927
AUROPHARMA
601
624
668
692
736
AXISBANK
412
425
449
462
486
BAJAJ-AUTO
2,499
2,559
2,611
2,670
2,722
BANKBARODA
147
150
155
158
164
BHEL
115
117
120
122
125
BPCL
592
601
612
622
633
BHARTIARTL
278
287
299
308
320
INFRATEL
316
326
342
352
367
BOSCH
18,412
19,064
19,625
20,278
20,839
CIPLA
537
560
574
597
612
COALINDIA
281
284
289
293
298
DRREDDY
2,896
2,947
3,031
3,082
3,166
EICHERMOT
20,191
20,557
21,153
21,519
22,115
GAIL
405
418
426
439
447
GRASIM
801
815
825
839
849
HCLTECH
761
778
807
823
853
HDFCBANK
1,160
1,173
1,181
1,194
1,202
HDFC
1,177
1,201
1,232
1,256
1,288
HEROMOTOCO
2,891
2,966
3,058
3,132
3,225
HINDALCO
150
155
163
168
176
HINDUNILVR
761
775
796
811
832
ICICIBANK
245
248
254
257
262
IDEA
66
68
73
75
79
INDUSINDBK
1,003
1,033
1,066
1,096
1,129
INFY
941
965
993
1,017
1,046
ITC
219
222
226
229
233
KOTAKBANK
692
702
714
724
737
LT
1,275
1,306
1,334
1,365
1,392
LUPIN
1,406
1,426
1,460
1,480
1,514
M&M
1,127
1,150
1,177
1,199
1,227
MARUTI
4,978
5,087
5,151
5,260
5,324
NTPC
154
158
161
165
168
ONGC
185
189
196
200
207
POWERGRID
176
179
182
185
188
RELIANCE
1,041
1,049
1,059
1,067
1,077
SBIN
237
243
254
260
271
SUNPHARMA
589
606
625
642
661
TCS
2,214
2,251
2,298
2,335
2,382
TATAMTRDVR
284
289
295
300
306
TATAMOTORS
450
458
468
476
487
TATAPOWER
69
71
75
78
82
TATASTEEL
369
380
398
409
427
TECHM
455
461
471
477
487
ULTRACEMCO
2,986
3,046
3,129
3,190
3,272
WIPRO
446
453
462
468
477
YESBANK
1,070
1,097
1,143
1,170
1,215
ZEEL
418
430
440
453
462
Technical Research Team
For Private Circulation Only
2
Derivatives Review | December 24, 2016
December series may expire on a flat note
Nifty spot closed at 7985.75 this week, against a close of 8139.45 last week. The Put-Call Ratio has decreased from 1.04 to 0.92
levels and the annualized Cost of Carry is positive at 7.05%. The Open Interest of Nifty Futures increased by 21.55%.
Derivatives View
Weekly OI gainers
OI
OI
Price
Scrip
Price
Nifty current month future closed with a premium of 9.25
Futures
Chg (%)
Chg (%)
points against a premium of 7.05 points to its spot. Next
NHPC
51408000
80.13
26.25
(3.14)
month future is trading with a premium of 42.20 points.
DIVISLAB
2187600
74.20
863.25
(25.25)
PCR-OI has decreased from 1.10 to 0.92 levels. In call option,
BHARATFIN
15280000
54.50
520.85
(18.80)
8000-8100 strikes were active and they also added huge
UNIONBANK
24368000
45.05
125.50
(8.43)
positions, followed by some unwinding in 8400-8500 call
option. While in put options, except for some build-up 7900
ENGINERSIN
7861000
41.52
321.15
4.93
strike, we hardly witnessed any relevant build-up. However,
CANBK
16419000
33.33
279.40
(7.05)
significant amount of unwinding was visible in 8000-8200
IDEA
94399000
33.26
70.35
(7.37)
strike prices. Highest OI in current series remains intact at
8300 call and 8000 put option.
TATAPOWER
27288000
31.88
73.95
(3.77)
Stock that added longs last week are ENGINERSIN, BEML,
CIPLA, BATAINDIA and IOC. While, fresh shorts were visible in
Weekly OI losers
NHPC, DIVISLAB, BHARATFIN, UNIONBANK and CANBK.
OI
OI
Price
Liquid counters with higher CoC are SOUTHBANK,
Scrip
Price
Futures
Chg (%)
Chg (%)
GMRINFRA, SYNDIBANK, SAIL and IFCI. Stocks with negative
SUNTV
7240000
(12.22)
489.10
(1.27)
CoC are PCJEWELLER, VOLTAS, UNIONBANK, ENGINERSIN
BIOCON
3304400
(10.68)
932.15
(4.51)
and JPASSOCIAT.
APOLLOTYRE
7719000
(9.47)
189.95
(2.34)
Last week, Nifty plunged below its strong support of 8050-
8100 and FIIs too actively participated in this move. They
TATACHEM
4051500
(9.12)
486.55
1.63
formed mixed positions in Index Futures, however, majority of
TATACOMM
4946200
(8.94)
624.85
(3.97)
their positions formed were on short side. At present, we
IGL
1525700
(8.51)
877.65
(4.04)
would like to wait for their follow-up activity before forming
any shorts at current levels. Thus, traders are suggested to
VEDL
44035500
(7.06)
217.10
(6.04)
remain light in Index and prefer stock specific approach to
GLENMARK
2236500
(6.82)
925.95
(0.66)
trade as of now.
Weekly change in OI
20,000
Call
Put
15,000
10,000
5,000
0
(5,000)
(10,000)
(15,000)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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