Technical and Derivatives Review | January 25, 2019
Pre-budget week would probably set the near term direction
Sensex (36026) / Nifty (10780)
Source: Trading View
Future outlook
Barring Monday’s session, our markets remained under pressure throughout the week. In fact, the Friday’s session turned out to be
a nightmare for bundle of individual stocks. Despite SGX Nifty suggesting a gap up opening, we had a subdued start in our market.
However, Nifty eventually joined hands with its global peers and surged beyond the 10900 mark within a blink of an eye. This was
followed by some consolidation throughout the first half; however, all of a sudden the selling aggravated post the midsession which
continued almost till the closing point. In the process, Nifty went on to correct more than 150 points from the day’s high and nearly
six tenths of a percent from the previous close.
It was certainly one of the terrible days for our market in last few weeks. Looking at the benchmark index, one would not get the
right picture. But if we meticulously observe some of the index constituents, like, ‘Zee’ who had the biggest fall in last five years,
became the spoilsport today. Apart from this, Automobile giant ‘Maruti’ continues with its disaster run, corrected more than 7%
after posting dreadful set of numbers. There were few others stocks also had similar sort of correction on the last day of the week
and hence, eventually Nifty succumbed to this pressure to sneak below the 10800 mark. Technically speaking, we are still hovering
around the pullback zone of ‘Falling Trend Line’; but the way some of the stocks corrected, certainly does not bode well for the bulls.
As far as levels are concerned, 10750 followed by 10692 would be seen as a crucial support zone. A sustainable move below this
would result into a sharp correction to test sub-10600 levels in days to come.
On the flipside, today’s high of 10931 has now become a key hurdle for the bulls. If index has to regain any strength ahead of the
Union Budget, this level needs to be surpassed convincingly to unfold the next leg of the rally. Till then it’s advisable to stay light and
avoid taking undue risks.
For Private Circulation Only
1
Technical and Derivatives Review | January 25, 2019
Stronger hands adding longs in stock futures
Nifty spot closed at 10780.55 this week, against a close of 10906.95 last week. The Put-Call Ratio has decreased from 1.56 to 1.37.
The annualized Cost of Carry is positive at 0.24%. The Open Interest of Nifty Futures has decreased by 0.83%.
Derivatives View
Nifty current month future closed with a premium of 5.40 points against a premium of 20.20 points to its spot. Next month future is
trading with a premium of 38.00 points.
As far as Nifty options activities for the week are concerned, we saw good amount of build-up in 10800-11000 call option. On the
other side, 10000 - 10900 put options shed decent positions. Maximum open interest for January series now stands at 11000 call
and 10800 put options.
On Monday, the benchmark index rallied almost towards 11000 mark but couldn’t sustain at these higher levels. We saw decent
selling pressure thereafter to bring index towards the support zone of 10750-10800. During the week, the open interest actiuvity in
Nifty futures remained muted. In options front, decent writing took place in 10800-11000 call options; whereas, put writer of
10500-10800 strikes covered their positions seeing the sharp sell-off. At present, 10700-10750 is an immediate support zone for
Nifty. As we have concluded the week near these support zones, we would advise traders to wait for the follow-up move in the
coming week before initiating any direction trades. It’s advisable to adopt stock specific approach for the time being.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
YESBANK
165317250
4.44
219.75
10.45
DISHTV
79360000
22.83
22.65
(32.99)
HAVELLS
5322000
6.78
709.50
4.47
ZEEL
23990200
39.15
319.15
(27.59)
PETRONET
12531000
3.24
226.75
3.70
ICICIPRULI
7539000
96.48
299.10
(14.80)
KSCL
1417500
8.62
576.40
3.50
UNIONBANK
45864000
20.77
79.45
(14.25)
OFSS
150150
20.02
3714.75
2.23
MARUTI
3045300
25.69
6512.45
(11.72)
Weekly change in OI
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2
Technical and Derivatives Review | January 25, 2019
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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