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Technical and Derivatives Review | October 25, 2019
For Private Circulation Only
Bulls started flexing their muscles, hoping for a strong rally soon
Sensex (39058) / Nifty (11584)
Source: Trading View
Future outlook
Although the benchmark index (Nifty) is well above where it was in last Diwali, the ground reality is really not the same. Look at the way
some of the stocks from the broader markets were hammered down brutally, most of them were trading at multi-year lows or 52-week
low. Market participants had to undergo a lot of stress as we didn’t see any respite in the market, if we keep aside last one month. Finally in
the second half of the September, our Finance Minister pulled off a masterstroke by slashing corporate tax rate. This certainly bolstered
traders’/ investors’ sentiments, which was then reflected in a colossal rally of more than 8 percent in merely two days. However, the pain is
still not out of the system as we can see some indecisive swings thereafter. In the midst of all, the market is at the cusp of a very interesting
junction.
This week, the benchmark index did nothing as we witnessed Nifty vacillating in merely 150 – 180 points to conclude the week with
marginal cuts. As per our recent ‘Time Retracement’ analysis, Nifty has reversed exactly in the September month and is now well above
recent lows. But the million dollar question remains the same, are we going to see sustained rally from hereon or not? Honestly, this would
probably be the toughest question to answer. But, we are still hopeful as we can see bulls trying to flex their muscles a bit and hence,
expect some good days to come for our market. On the daily chart, we can see a breakout happening during last week from an ‘Inverse
Head and Shoulders’ pattern. Although the follow up move is lacking, one should remain upbeat as long as recent swing low of 11090 is
intact. Meanwhile, 11450 – 11350 can be seen as immediate supports and on the higher side, we could see rally extending towards 11850 –
11900 first or may be beyond 12000 once Nifty manages to sustain above 11700. The Banking index has been a laggard of late, which needs
to step up and we expect it to happen soon.
Traders/ Investors are advised to keep following ‘Buy on declines’ strategy and should focus on apt candidates which are gearing up for
decent moves going ahead. We hope for the new SAMVAT to bring back lot of positivity in the market and by next Diwali, markets should
be at much elevated levels with broad based rallies from hereon.
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Technical and Derivatives Review | October 25, 2019
For Private Circulation Only
11500-11600 to act as a strong base now
Nifty spot closed at 11583.90 this week, against a close of 11661.85 last week. The Put-Call Ratio has decreased from 1.44 to 1.21.
The annualized Cost of Carry is positive at 13.16%. The Open Interest of Nifty Futures has increased by 6.44 %.
Derivatives View
Nifty current month future closed with a premium of 25.05 points against a premium of 8.15 points to its spot. Next month future is
trading with a premium of 68.65 points.
As far as Nifty options activities for the week are concerned, we witnessed decent build-up in 11600-12000 call options. On the
flipside, 11500 and 11600 put options added good amount of open interest which indicates put writing. Maximum open interest for
the monthly series now stands at 12000 call and 11000 put option.
It was a week of consolidation for our market, we started off the week on a positive note and saw upmove beyond 11700 mark.
However, this move was short lived as decent amount of profit booking was witnessed from the higher levels and then consolidation
took place from next two sessions. On Friday, we saw follow-up selling to drag index slightly below 11500 mark; but, Nifty recouped
major portion of the intraday losses to eventually conclude the week tad above 11550. We witnessed mixed positions in Nifty
futures; whereas, decent short covering took place in banking index. Considering Friday’s recovery from the support zone of
11500-11550, we expect extension of the recent upmove towards 11700 and then further buying shall bring index towards 11850.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
CENTURYTEX 2616000 49.42 412.60 2.79
JUBLFOOD 3213500 34.96 1526.90 12.68
TORNTPHARM 489000 22.86 1747.80 3.42
NIITTECH 747000 19.71 1502.05 6.10
ICICIBANK 84475875 11.79 470.00 7.11
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
INFRATEL 15808000 113.85 214.40 (17.74)
INFY 72214800 42.37 639.25 (15.88)
CUMMINSIND 2312100 40.20 543.20 (7.32)
HEXAWARE 2289000 38.60 340.35 (10.27)
CHOLAFIN 3647500 20.98 286.55 (4.85)
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Technical and Derivatives Review | October 25, 2019
For Private Circulation Only
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearch-cso@angelbroking.com
For Derivatives Queries E-mail: derivatives.desk@angelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com
Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelbroking.com
Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com