July 25, 2015
Technical Picks |
Major hurdle at 8650 for bulls
Sensex (28112) / Nifty (8522)
The opening session of the week on Monday started on a
Exhibit 1: Nifty Weekly chart
subdued note citing mixed global cues. During the first half of
the session, our market remained under pressure mainly on
the back of weakness in some of the banking conglomerates.
However, the Nifty managed to give a decent recovery during
the penultimate hour of the session to trim a major portion of
the day's losses. This was followed by a weak session on Tuesday.
However, the Nifty was reluctant to breach the 8500 mark on
the lower side. Thus, we witnessed a strong up move on
Wednesday; in the process, the Nifty regained the 8600 level
Source: Falcon
on a closing basis. The remaining two sessions traded with a
Exhibit 2: Nifty Daily chart
negative bias and eventually, the Nifty closed the week a tad
above the 8500 mark. On the sectoral front, the IT, Consumer
Durables and Oil & Gas counters ended the week well inside
the positive territory; whereas, the Banking, Capital Goods and
Healthcare conglomerates were among the major losers. The
Nifty ended the week with a cut of 1.03% over the previous
week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
Source: Falcon
27790 / 8402 and 25724 / 7743 levels, respectively.
attempts led to minor corrections. However, the overall
The '20-day EMA' and the '20-week EMA' are placed at
movement during the week was clearly range bound, as per
28052 / 8484 and 27803 / 8406 levels, respectively.
our expectation. Going forward, the lower end of the 'Rising
wedge' pattern, i.e. 8480, now holds a key support for the
Future outlook
Nifty. Only a sustainable move below this level may apply brakes
In the concluded week, we witnessed a see-saw action, as neither
on the ongoing up trend. In this scenario, a possibility of a
of the counter parties was able to take a hold of the market.
correction towards the next support zone of 8400 - 8315 cannot
Having said that, it can be concluded that the bears were
be ruled out. Until then the Nifty is likely to trade with a positive
marginally ahead of the bulls as the Nifty shed a percent over
bias and 8650 would stand to be an immediate hurdle on the
the previous week's closing. In our previous weekly report, we
upside. We maintain our view that for the extension of the recent
had clearly stated that the Nifty needs to convincingly cross the
rally towards 8750 - 8830, the Nifty needs to surpass this barrier
major hurdle of 8635 - 8670, for continuation of the uptrend.
decisively. We still believe that there is continued scope for stock
Also, a failure to do so would lead to a range bound action.
specific action in the market and it is therefore advisable to
During the entire week, it was clearly seen that the Nifty was
follow a stock centric approach.
struggling to cross the 8650 mark and thus, failure of several
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July 25, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
27,746
27,929
28,254
28,437
28,761
NIFTY
8,402
8,462
8,558
8,618
8,714
BANKNIFTY
18,264
18,450
18,799
18,985
19,335
ACC
1,367
1,388
1,425
1,446
1,483
AMBUJACEM
230
235
244
249
258
ASIANPAINT
785
817
843
875
902
AXISBANK
558
569
586
598
615
BAJAJ-AUTO
2,365
2,431
2,544
2,610
2,722
BANKBARODA
144
150
154
160
164
BHEL
273
276
283
287
294
BPCL
921
943
965
987
1,009
BHARTIARTL
410
422
437
449
465
BOSCH LIMITED
22,498
22,876
23,484
23,863
24,471
CAIRN
142
158
173
190
205
CIPLA
645
662
677
693
708
COALINDIA
416
421
429
434
442
DRREDDY
3,768
3,839
3,902
3,972
4,035
GAIL
345
353
365
373
385
GRASIM
3,540
3,606
3,695
3,761
3,850
HCLTECH
912
932
964
984
1,015
HDFCBANK
1,069
1,088
1,108
1,128
1,148
HDFC
1,280
1,320
1,342
1,382
1,404
HEROMOTOCO
2,620
2,680
2,714
2,775
2,809
HINDALCO
103
106
109
112
115
HINDUNILVR
843
875
903
935
964
ICICIBANK
286
293
307
314
327
IDEA
171
175
181
185
191
INDUSINDBK
915
935
951
971
987
INFY
913
1,000
1,075
1,162
1,236
ITC
303
309
316
322
329
KOTAKBANK
702
713
729
741
756
LT
1,742
1,772
1,827
1,858
1,913
LUPIN
1,444
1,558
1,771
1,885
2,097
M&M
1,250
1,290
1,329
1,369
1,408
MARUTI
4,082
4,158
4,210
4,286
4,338
NMDC
111
112
114
115
117
NTPC
134
136
137
140
141
ONGC
271
277
286
291
300
POWERGRID
137
139
141
144
146
PNB
130
135
140
144
149
RELIANCE
967
996
1,032
1,061
1,097
SBIN
256
259
266
270
276
SUNPHARMA
703
770
862
928
1,020
TCS
2,412
2,459
2,530
2,576
2,647
TATAMOTORS
374
382
393
401
411
TATAPOWER
69
70
73
74
76
TATASTEEL
249
257
272
280
295
TECHM
474
493
504
522
533
ULTRACEMCO
2,978
3,091
3,230
3,343
3,482
VEDANTA
120
126
136
143
153
WIPRO
542
555
574
586
606
YESBANK
783
796
814
826
845
ZEEL
352
371
390
410
429
Technical Research Team
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July 25, 2015
Derivatives Review |
Don't expect big downside before expiry
Nifty spot closed at 8521.55 this week against a close of 8609.85 last week. The Put-Call Ratio has decreased from 1.22 to 1.06
levels and the annualized Cost of Carry is positive at 9.14%. The Open Interest of Nifty Futures increased by 1.47%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 1.22 to 1.06 levels mainly due to
Implied Volatility (IV) for NIFTY has increased from 12.00% to
open interest addition in call options. Huge buildup was visible
12.05%. Historical volatility (HV) of NIFTY is at 16.01% and
in 8600-8700 call options last week which are blend of long
that for BANKNIFTY is trading at 21.90%. Liquid counters having
and short formation. On the other hand in put options we could
very high HV are SUNPHARMA, INFY, LUPIN, BAJAJ-AUTO and
hardly witness any strike adding fresh open interest, huge
KTKBANK. Stocks where HV are on lower side are AMTEKAUTO,
amount of unwinding was seen in 8400-8600 put options.
SRTRANSFIN, BHEL, HEXAWARE and NMDC.
Maximum buildup in current series is seen in 8700 call & 8500
put options.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 12.80 points
`2,42,434/- cr. to `2,59,358/- cr. Stock futures open interest
against a premium of 15.20 points to its spot. Next month
has increased from `65,889/- cr. to `69,345/- cr. Liquid
future is trading with premium of 54.95 points. Liquid counters
counters names which added significant positions last week
where CoC is high are POWERGRID, ONGC, LUPIN,
are BAJAJ-AUTO, LUPIN, DLF, ICICIBANK and HINDUNILVR.
AMBUJACEM and GRASIM. Stocks with negative CoC are GAIL,
On the other hand unwinding was visible in counters like
NMDC, TECHM, HEROMOTOCO and BANKBARODA.
AMBUJACEM, NTPC, ZEEL, BHEL and LT.
Derivative Strategy
Scrip : NIFTY
CMP : 8521.55
Lot Size : 25
Exercise Date (F & O) :
30th. July 2015
View: Mildly Bullish
Strategy: Ratio Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
25
NIFTY
8500
JULY
CE
60.00
8475
(`20.00)
SELL
50
NIFTY
8600
JULY
CE
20.00
8525
`5.00
LBEP
-
8520
UBEP - 8680
8575
`55.00
8625
`55.00
Max. Risk: Unlimited
Max. Profit: `2,000/-
If NIFTY continues to move above UBEP.
If NIFTY closes at 8600 level on expiry.
8675
`5.00
NOTE: Profit can be booked before expiry if NIFTY moves in favorable direction and time value decays.
8725
(`45.00)
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E-mail: [email protected]
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