Technical Picks | February 27, 2016
6960 a key support for the Nifty
Sensex (23154) / Nifty (7030)
Trading for the week kick started on a positive note on
Exhibit 1: Nifty Weekly chart
Monday with our markets drawing influence from the
continuation of the relief rally across most globe markets.
However, on Tuesday, we witnessed a complete nosedive in
the broader market with the Nifty breaching the 7100 mark
on the lower side on an intraday basis. This pessimism
continued over the next couple of sessions and led the index
to retest the important swing low of 6960. However, a
modest recovery on Friday led to a weekly close slightly
above the 7000 mark for the Nifty. The Nifty eventually
ended the volatile week with a cut of 2.51% over the
previous week’s closing.
Pattern formation:
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex / Nifty are placed at 25049 / 7583 and 25664 /
Source: Company, Angel Research
7761 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Exhibit 2: Nifty Daily chart
Sensex / Nifty are placed at 23774 / 7192 and 25012 /
7604 levels, respectively.
Future outlook
After a week of a breather, our markets once again fell
under the radar of the bears and got subjected to quite a bit
of hammering during the week. The proceedings for the
week began with the previous week’s optimism spilling over
Monday’s session and the Nifty inched towards the 7250
mark. We expected the Nifty to test 7280 and believed it
would then be difficult for the bulls to carry forward the
momentum. But the index lost steam a little earlier than our
expectation and took a u-turn after posting a high of
7252.40. Due to the sharp correction from the highs, the
Nifty has now closed a tad above the 7000 mark. In the
Source: Company, Angel Research
course of action, the bulls have successfully managed to
defend the important swing low of 6960.65. This level is
On Monday, the Finance Ministry is going to announce the
important because the hourly ‘Higher Top Higher Bottom’
Union Budget for FY2016 - 2017, which would be a mega
remains intact as long as the Nifty remains above this
event to watch out for. Thus, considering the higher volatility,
support. Going forward, if the Nifty manages to stay beyond
traders should stay light on positions pre-announcement and
7052.90 then we may expect it to retest 7200 - 7252 levels.
then look to assess the situation post the event to get a
In the forthcoming week, a trend deciding level on the
directional cue for the near term.
upside would be 7252; whereas, on the downside, 6960
and 6869 are seen as crucial support levels.
For Private Circulation Only
1
Technical Picks | February 27, 2016
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
22,412
22,783
23,319
23,690
24,226
NIFTY
6,790
6,910
7,081
7,201
7,372
NIFTY BANK
12,979
13,385
13,926
14,332
14,873
ACC
1,115
1,153
1,220
1,258
1,325
ADANIPORTS
186
193
202
209
219
AMBUJACEM
180
185
191
195
201
ASIANPAINT
836
849
867
881
899
AXISBANK
366
376
387
398
409
BAJAJ-AUTO
2,052
2,145
2,315
2,408
2,578
BANKBARODA
119
126
134
141
148
BHEL
85
90
97
102
108
BPCL
712
738
758
784
803
BHARTIARTL
305
312
323
330
341
BOSCH
15,394
16,052
16,770
17,428
18,146
CAIRN
112
118
126
132
139
CIPLA
499
512
522
535
545
COALINDIA
283
297
307
321
330
DRREDDY
2,840
2,917
3,033
3,110
3,226
GAIL
279
291
311
323
343
GRASIM
3,081
3,191
3,343
3,453
3,605
HCLTECH
775
800
825
850
875
HDFC
907
934
965
992
1,023
HDFCBANK
991
1,022
1,043
1,074
1,095
HEROMOTOCO
2,408
2,482
2,605
2,679
2,802
HINDALCO
63
66
69
72
75
HINDUNILVR
808
829
847
868
887
ICICIBANK
168
177
189
197
210
IDEA
99
102
107
110
114
INDUSINDBK
775
796
826
846
876
INFY
1,079
1,100
1,122
1,143
1,165
ITC
274
282
293
301
311
KOTAKBANK
583
599
621
637
659
LT
1,034
1,072
1,120
1,159
1,207
LUPIN
1,653
1,690
1,755
1,792
1,857
M&M
1,170
1,200
1,225
1,254
1,279
MARUTI
3,258
3,333
3,451
3,527
3,644
NTPC
108
115
124
131
140
ONGC
204
210
214
220
225
POWERGRID
125
129
135
140
146
PNB
65
69
73
77
82
RELIANCE
926
938
953
965
981
SBIN
142
149
158
165
174
SUNPHARMA
824
848
873
897
922
TCS
2,089
2,150
2,246
2,307
2,404
TATAMOTORS
279
290
308
319
336
TATAPOWER
55
56
58
59
61
TATASTEEL
233
241
251
259
270
TECHM
393
405
424
436
454
ULTRACEMCO
2,633
2,702
2,819
2,888
3,006
VEDL
66
69
72
75
79
WIPRO
508
519
534
545
560
YESBANK
637
662
691
716
745
ZEEL
365
373
384
392
403
Technical Research Team
For Private Circulation Only
2
Derivatives Review | February 27, 2016
No shorts in recent correction, trade with positive bias.
Nifty spot closed at 7029.75 this week, against a close of 7210.75 last week. The Put-Call Ratio has increased from 0.79 to 0.82
levels and the annualized Cost of Carry is positive at 3.38%. The Open Interest of Nifty Futures decreased by 22.34%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased marginally from 0.79 to 0.82 levels.
Implied Volatility (IV) for NIFTY has increased from 16.13%
Being start of new series the build-up is quite scattered. In
to 19.64%. Historical volatility (HV) of NIFTY is at 24.62%
call options, 7000-7500 strike added good amount of
and that for BANKNIFTY is at 32.84%. Liquid counters
build-up. While in put options, decent OI addition was
having very high HV are POWERGRID, GRASIM, BAJAJ-
witnessed in 6500-7100 strike prices. Maximum build-up in
AUTO, HDFCBANK and NTPC. Stocks where HV are on
current series is seen in 7500 call options and 7000 put
lower side are GLENMARK, NMDC, WOCKPHARMA,
options.
RELINFRA and TATASTEEL.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 25.40
`2,47,612/- cr. to `1,68,030/- cr. Stock futures open
points against a premium of 21.45 points to its spot. Next
interest has decreased from `61,411/- cr. to `50,078/- cr.
month future is trading with premium of 54.35 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are WIPRO, IDFC,
week are MINDTREE, NTPC, INFRATEL, OFSS and
HINDALCO, VEDL and NMDC. Stocks with negative CoC
IBULHSGFIN. On the other hand unwinding was visible in
are COALINDIA, PNB, ONGC, BHARTIARTL and
counters like ACC, COALINDIA, NMDC, AMBUJACEM and
ULTRACEMCO.
TATASTEEL.
Derivative Strategy
Scrip: RELIANCE
CMP : `956.75
Lot Size : 500
Exercise Date (F & O) :
31st Mar 2016
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
500
RELIANCE
960
MAR
CE
28.00
930
`0.00
SELL
1000
RELIANCE
1000
MAR
CE
14.00
960
`0.00
BEP - `1040.00
990
`30.00
1020
`20.00
Max. Risk: Unlimited
Max. Profit: `20,000
If RELIANCE continues to move above BEP on expiry
If RELIANCE closes at `1000 levels on expiry
1050
(`10.00)
1080
(`40.00)
NOTE: Profit can be booked before expiry if RELIANCE moves in favourable direction and time value decays.
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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