Technical and Derivatives Review | January 25, 2018
Some respite ahead of Union Budget
Sensex (36050 ) / Nifty (11070)
Source: Trading View
Future outlook
In the week gone by, we saw Nifty ascending to a great extent in first couple of trading sessions and in this process, has managed to
clock record highs well above the 11000 mark. However, during the latter half, the index chose to consolidate a bit after a sharp run
as we were heading for an extended weekend just ahead of the Union Budget. Eventually, the Nifty successfully managed to defend
its important milestone of 11000 on a weekly basis.
Of late, we saw tremendous optimism in our market and hence, the index kept marching higher to conquer many important
junctions. However, since last couple of days, we can see some respite in the market as the index hastened towards its crucial near
term point of 11100 before anyone could realize it. We have been stating the importance of this level as it coincides with the 161%
price extension of the rally seen during 2008 - 10. Although, recently, there has been not much respect to any level but since 161%
is considered as an important ratio as per the ‘Fibonacci series’ and mainly because the major event is around the corner now, it’s
important to draw attention to this point. Going forward, we need to see how market behaves in next three trading sessions;
because in last couple of days, we have already witnessed a good amount of profit booking in number of individual stocks. As far as
trading strategy for next few days is concerned, we reiterate that traders should look to take some money off the table ahead of the
major event. Last year, trading before the budget was quite easy as compared to the current one; but now, low hanging fruit is
already gone and hence, it would be a daunting task finding good trade set ups. One can keep focusing on stock specific moves by
following a proper exit strategy.
For Private Circulation Only
1
Technical and Derivatives Review | January 25, 2018
Strong Rollovers for rate sensitive index
Nifty spot closed at 11069.65 this week, against a close of 10894.70 last week. The Put-Call Ratio decreased from 1.74 to 1.42 levels
and the annualized Cost of Carry is negative at 0.83%. The Open Interest of Nifty Futures decreased by 24.23%.
Derivatives View
Nifty current month future closed with a discount of 7.05 points against a premium of 26.30 points to its spot. Next month future is
trading with a premium of 5.50 points.
PCR-OI has plunged from 1.74 to 1.42 levels on week on week basis. Being start of new series the overall build-up is quite scattered
between 11200-11500 call and 10500-11000 put options. Now, maximum open interest in call option stood at 10800; followed by
11500 strike; whereas, in put option is placed at 10500 strike.
Post some consolidation in the inceptive week of January series, the benchmark index extended its gains to clock yet another
milestone of 11000 mark. The journey from 10800 to 11100 was indeed an effortless one as we saw a mesmerizing rally across the IT
and Banking space. During the series, we saw good amount of long formation in Nifty as well as BankNifty and looking at the rollover
data we believe decent amount of these position have been rolled too. Especially, in BankNifty as open interest has surged nearly
80% series on series. Considering the above data points, we would advise traders avoiding any short positions in index and focus on
individual stocks.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Pric
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%
NIITTECH
1600500
17.51
910.05
24.45
MCDOWELL-N
2383500
18.94
3390.80
(8.7
OFSS
125250
14.86
4243.00
3.24
INDIACEM
27013000
16.76
176.20
(4.4
JISLJALEQS
48573000
13.05
146.55
7.88
CADILAHC
6312000
13.98
420.70
(4.8
FORTIS
54089000
10.71
158.35
8.35
BHARTIARTL
51039100
13.44
452.00
(9.4
JPASSOCIAT
250954000
10.11
22.20
1.83
EICHERMOT
277950
8.42
26700.95
(4.8
Weekly change in OI
For Private Circulation Only
2
Technical and Derivatives Review | January 25, 2018
Technical and Derivatives Team:
Sameet Chavan
Chief Analyst - Technical & Derivatives
[email protected]
Ruchit Jain
Technical Analyst
[email protected]
Rajesh Bhosale
Technical Analyst
[email protected]
Sneha Seth
Derivatives Analyst
[email protected]
Research Team Tel: 022 - 39357600
Website: www.angelbroking.com
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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