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For Private Circulation Only
Technical and Derivatives Review |June 26, 2020
Bulls defended the territory, better to take one step at a time
Sensex (35171) / Nifty (10383)
Source: Trading View
Future outlook
The previous week’s tail end surge was followed by a good start on Monday; but the overall trading range was extremely narrow. We
continued upward momentum on the following day as well, in fact on Wednesday, markets started with a bang at three months high. But
all of a sudden, markets took a nosedive from higher levels. This turned out to be a profit booking after a consistent rally of nearly 800
points in a span of 5-6 days. Last couple of days’ price action was more of a range bound action with a positive bias. Eventually, Nifty ended
the week by adding over a percent from the previous weekly close.
During the midst of the week, we witnessed a reality check at 10500 and fortunately, the profit booking did not extend too long. In fact,
prior to Friday’s session, we were hoping Nifty not to close below 10300-10250 levels. Because this would have resulted in a formation of
‘Shooting Star’ pattern that too near ‘200-SMA’ on the weekly chart. However, due to Friday’s close, we can see a formation of ‘Spinning
Top’ pattern and this generally indicates neutral bias i.e. neither the bulls dominated, nor the bears had the upper hand. Ideally a close
beyond 10500-10550 would have suggested a stronger closer but nevertheless bulls somehow managed to defend their territory. Now, this
week’s low of 10194 would now be seen as a key support and as long as we are above it, there is no reason to worry. So practically
speaking, traders are advised to trail stop losses higher at this level and a breach of this would result in a strong bout of profit booking in
the market.
On the flipside, we expect the rally to continue and a move beyond 10500 would certainly unfold the next leg towards 10700 - 10850 levels.
Since, there is a cluster of resistance at every 200 points up move from hereon, traders are advised to take one step at a time and should
ideally avoid carrying aggressive bets overnight.
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For Private Circulation Only
Technical and Derivatives Review |June 26, 2020
Options data hints probability of some consolidation
Nifty spot closed at 10383 this week, against a close of 10244.40 last week. The Put-Call Ratio has decreased from 1.56 to 1.33. The
annualized Cost of Carry is negative at 6.72%. The Open Interest of Nifty Futures has increased by 8.37%.
Derivatives View
Nifty current month future closed with a discount of 65 points against a premium of 26.35 points points to its spot. Next month
future is trading at a discount of 67.60 points.
As far as Nifty options activities for the week are concerned, we witnessed open interest addition in 10500 call option. On the
flipside, open interest addition was seen in 10000 put option. Maximum open interest for the weekly series is at 11000 call option
and 10000 put option.
During the monthly expiry week, the index witnessed some profit booking from the resistance of 10500. The rollover in Nifty is
higher than its average indicating long position being rolled. However, FII’s have not rolled much of their index futures long
positions. The weekly options data indicates a probable trading range of 10000-10500 for the coming week. Thus, there is possibility
of some consolidation and hence, traders are advised to trade with a stock specific approach.
Long
Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
COLPAL
2179800
21.93
1394.20
2.65
SUNTV
5452500
12.30
419.90
5.09
NIITTECH
580500
11.85
1462.25
9.55
MRF
17250
9.66
66144.85
4.91
TECHM
18236400
7.70
556.65
3.40
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
AMARAJABAT 1817000 27.62 648.95 (3.86)
ONGC
68445300
26.07
84.20
(1.86)
EXIDEIND
11638800
12.25
149.10
(1.91)
RELIANCE
36637750
7.96
1738.70
(1.23)
TORNTPHARM
1198500
7.92
2472.50
(2.62)
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For Private Circulation Only
Technical and Derivatives Review |June 26, 2020
Research Team Tel: 022 - 39357600 (Extn – 6844) Website: www.angelbroking.com
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Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.cha[email protected]g.com
Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jai[email protected].com
Rajesh Bhosale Technical Analyst rajesh.bhosl[email protected]ng.com
Sneha Seth Derivatives Analyst [email protected]gelbroking.com