September 26, 2015
Technical Picks |
All eyes on Dr Rajan - Avoid aggressive longs
Sensex (25864) / Nifty (7869)
The Nifty started the proceedings for the week with a downside
Exhibit 1: Nifty Weekly chart
gap opening on Monday, owing to negative cues from global
bourses. However, the bulls showed tremendous resilience in
the second half of the session and pulled the index higher,
leading it to close on a flat note. This was followed by a gap up
opening on Tuesday; this lead however was short lived as a
sharp selloff was then witnessed across the broader market.
The following sessions of the week traded with mixed sentiments;
in the process, the Nifty managed to regain the 7850 mark on
a weekly closing basis. On the sectoral front, the gains were
Source: Falcon
led by Consumer Durables, Healthcare and IT stocks; whereas,
Exhibit 2: Nifty Daily chart
the Metal sector became the major loser along with Capital
Goods, Oil & Gas and Banking. The Nifty ended the concluded
week with a cut of 1.42% over the previous week's close.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
26992 / 8184 and 25909 / 7812 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
26003 / 7904 and 27060 / 8204 levels, respectively.
Source: Falcon
Future outlook
despite strong anticipation of a 25bp rate cut in the forthcoming
The concluded week witnessed volatility citing continued global
RBI Monetary Policy slated on September 29, 2015, we would
uncertainty. In our previous report, we had clearly advised to
still maintain our cautious stance on the market. We may
lighten up long positions around the mentioned resistance level
reassess our stance after the outcome of the event, and take a
of 8060 on the Nifty. Although the index reversed after posting
view factoring in the developments on the charts. Until then,
a high of 8021.60 (marginally lower than the mentioned
we believe that it's a 'Sell on Rise' market and in case of a
resistance), the direction was clear, in line of our view. We were
bounce, one can resolve to shorting individual stocks by
unable to initiate short positions on the index but we were
maintaining strict stop losses. As of now, we are seeing an
successful in participating in stock specific shorts. On
immediate trading range of 8055 to 7723 for the Nifty. A breach
Wednesday, the index managed to give a decent bounce after
of the 7723 mark on the lower side on a sustainable basis
taking a support around the 61.8% Fibonacci retracement level
would trigger pessimism in the market; in such a scenario, we
of the rise from 7539.50 to 8055. However, the weekly as well
may see the Nifty sliding towards 7650 - 7540 levels.
as the monthly chart structure is still negatively poised. Thus,
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September 26, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,910
25,387
25,863
26,340
26,816
NIFTY
7,573
7,721
7,871
8,019
8,169
BANKNIFTY
16,309
16,753
17,203
17,646
18,096
ACC
1,283
1,313
1,355
1,385
1,427
AMBUJACEM
199
203
207
211
216
ASIANPAINT
756
781
810
835
864
AXISBANK
478
496
515
533
553
BAJAJ-AUTO
2,153
2,218
2,275
2,341
2,398
BANKBARODA
175
180
188
194
202
BHEL
184
191
200
208
217
BPCL
838
859
876
897
914
BHARTIARTL
314
324
341
351
368
BOSCH LIMITED
18,736
19,522
20,710
21,495
22,684
CAIRN
136
143
147
154
158
CIPLA
624
633
643
653
663
COALINDIA
298
308
326
337
355
DRREDDY
3,799
3,885
3,942
4,028
4,085
GAIL
274
284
294
304
313
GRASIM
3,335
3,384
3,434
3,483
3,533
HCLTECH
889
922
946
979
1,002
HDFCBANK
1,002
1,027
1,043
1,068
1,085
HDFC
1,108
1,145
1,181
1,218
1,254
HEROMOTOCO
2,324
2,353
2,401
2,430
2,479
HINDALCO
66
69
74
76
81
HINDUNILVR
762
772
786
796
810
ICICIBANK
255
262
271
278
287
IDEA
133
136
142
145
151
INDUSINDBK
852
889
911
948
970
INFY
1,068
1,104
1,129
1,165
1,189
ITC
301
312
318
328
334
KOTAKBANK
613
634
652
673
691
LT
1,376
1,419
1,491
1,534
1,605
LUPIN
1,765
1,878
1,940
2,053
2,116
M&M
1,149
1,185
1,209
1,245
1,269
MARUTI
4,302
4,435
4,519
4,651
4,736
NMDC
87
91
98
102
109
NTPC
114
118
123
127
132
ONGC
216
222
232
238
248
POWERGRID
117
121
129
133
141
PNB
126
131
136
141
147
RELIANCE
800
819
853
872
907
SBIN
226
232
240
247
255
SUNPHARMA
873
882
898
907
922
TCS
2,453
2,517
2,553
2,617
2,653
TATAMOTORS
280
292
313
325
347
TATAPOWER
60
62
64
67
69
TATASTEEL
204
210
219
225
235
TECHM
524
546
562
584
601
ULTRACEMCO
2,615
2,713
2,825
2,923
3,034
VEDANTA
84
90
95
101
106
WIPRO
574
589
597
611
619
YESBANK
677
699
736
758
796
ZEEL
367
381
392
406
418
Technical Research Team
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September 26, 2015
Derivatives Review |
Market may bounce a little; avoid going long
Nifty spot closed at 7868.50 this week against a close of 7981.90 last week. The Put-Call Ratio has decreased from 1.00 to 0.93
levels and the annualized Cost of Carry is positive at 3.60 %. The Open Interest of Nifty Futures decreased by 25.12%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 1.00 to 0.93 levels. Being start of
Implied Volatility (IV) for NIFTY has increased from 18.53% to
new series the over-all build-up is quite scattered. In call options
19.03%. Historical volatility (HV) of NIFTY is at 26.67% and
OI addition was seen between 7500-8500 strikes and in put
that for BANKNIFTY is trading at 38.12%. Liquid counters having
options was scattered in a broad range of 7000-7900 strikes.
very high HV are IDBI, SOUTHBANK, MOTHERSUMI, EXIDEIND
IV's still remains on the lower side at 19.03% and we expect it
and JPASSOCIAT. Stocks where HV are on lower side are SRF,
to increase from current levels. Maximum buildup in current
SUNPHARMA, GLENMARK, CIPLA and AMBUJACEM.
series is seen in 8300 call & 7800 put options.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 27.20 points
`2,39,714/- cr. to `1,59,358/- cr. Stock futures open interest
against a premium of 0.65 points to its spot. Next month future
has decreased from `60,073/- cr. to `52,225/- cr. Liquid
is trading with premium of 60.75 points. Liquid counters where
counters names which added significant positions last week
CoC is high are SBIN, JINDALSTEL, RELIANCE, COALINDIA
are PTC, MOTHERSUMI, IDBI, MINDTREE and DIVISLAB. On
and LT. Stocks with negative CoC are CAIRN, GAIL,
the other hand unwinding was visible in counters like DRREDDY,
INDUSINDBK, INFY and IDFC.
M&M, IDFC, CAIRN and TATAPOWER.
Derivative Strategy
Scrip : NIFTY
CMP : 7868.50
Lot Size : 25
Exercise Date (F & O) :
29th. Oct 2015
View: Volatile
Strategy: Long Strangle
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(Rs)
(Rs)
Profit/Loss
BUY
25
NIFTY
8000
OCT
CE
120.00
7250
`290.00
BUY
25
NIFTY
7800
OCT
PE
140.00
7500
`40.00
LBEP
-
7540
UBEP - 8260
7750
(`210.00)
Max. Risk: `6,500/-
Max. Profit: Unlimited
8000
(`260.00)
If NIFTY closes between two strike price on expiry .
If NIFTY continues to move below LBEP or above
8250
(`10.00)
UBEP on expiry
8500
`240.00
NOTE: Profit can be booked before expiry if NIFTY moves in one direction and implied volatility increases.
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Ratings (Based on expected returns
Buy (> 15%)
Accumulate (5% to 15%)
Neutral (-5 to 5%)
over 12 months investment period):
Reduce (-5% to -15%)
Sell (< -15)