Technical and Derivatives Review | September 27, 2019
For Private Circulation Only
Market extends gains but momentum seems to have disappeared
Sensex (38823) / Nifty (11512)
Source: Trading View
Future outlook
Last Friday market took a giant leap after FM’s announcement on slashing corporate taxes. All of a sudden, the tide turned upwards and
before anyone could realise, the Nifty was well above 11200. Since it was predominantly a short squeezing move, markets were not done
with such sharp one day spurt. Expectedly, we had a good bump up on Monday to kick start the week on a strong note. Participants were
so ecstatic; the Nifty went on to almost kiss the 11700 mark in the initial euphoric move. However, this seemed to be an overreaction and
hence, throughout the remaining part of the week, market consolidated in a slender range to eventually conclude tad above 11500.
Practically speaking, Nifty soared 1000 points in merely two days and one has to understand, it is very seldom to see such colossal move in
a quick succession. So, to bring the market sentiments back to the equilibrium, we either had to see natural profit booking or had to spend
some time in a range. As of now, market seemed to have opted for the second choice and hence, we consolidated after Monday’s bump
up. Now, the low hanging fruit or the easy money is already gone at least for traders. We are likely to witness such choppy moves now and
hence, one needs to be very selective while picking up a stock. Yes, the directional bias remains positive as long as we are above the 11200
mark. Meanwhile, any dip should be construed as a buying opportunity. The immediate range can now be seen at 11400 11700 and it’s
advisable to stay light in this band. However having said that, it’s a matter of time, we expect index coming out of it very soon and more
importantly in the upward direction. In this scenario, the next levels to watch out for would be around 11900 – 12000.
Traders are advised to keep a tab of all the above mentioned levels and should focus on individual stocks that are likely to provide better
trading opportunities. The actual momentum will now trigger only above 11650 11700, which will attract lot of participants who are still
waiting on the side lines.
Technical and Derivatives Review | September 27, 2019
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Stronger hands lightened up 60% of their positions
Nifty spot closed at 11512.40 this week, against a close of 11274.20 last week. The Put-Call Ratio has decreased from 1.39 to 1.19.
The annualized Cost of Carry is positive at 6.45%. The Open Interest of Nifty Futures has decreased by 33.34%.
Derivatives View
Nifty current month future closed with a premium of 67.10 points against a premium of 60.45 points to its spot. Next month future
is trading with a premium of 116.20 points.
As far as Nifty options activities for the week are concerned, build-up was scattered between 11500-12000 call option. On the other
side, 11400-11600 put added good amount of positions. Maximum open interest for the monthly series now stands at 11500
followed by 12000 call and 11000 followed by 11500 put option.
We began Monday’s session with an upside gap and saw extension of last Friday’s move almost towards 11700 mark. The
benchmark index then consolidated in the remaining days to conclude 2% higher week on week. We did see addition of fresh longs
in the end of September series and these positions have been rolled too. FIIs added short positions for the major part of the last
series but preferred lightening up 60% of their positions MoM. Such unwinding shall be taken optimistically and must keep a close
watch on their positions in the coming series. Considering the above data point, we expect continuation of recent upmove and
hence, would advise traders to trade with a positive bias.
Long Formation
Chg (%)
Chg (%)
CONCOR 5226672 40.56 596.10 6.80
NESTLEIND 544400 15.76 13831.10 2.20
MANAPPURAM 13776000 15.49 144.00 12.11
EXIDEIND 9655200 13.39 195.15 7.08
BERGEPAINT 4571600 10.71 439.35 10.03
Short Formation
Chg (%)
Chg (%)
ZEEL 32914700 68.07 275.10 (9.15)
CESC 1626400 33.49 769.20 (9.06)
PETRONET 21147000 17.03 262.00 (2.55)
STAR 2799600 14.14 301.20 (16.76)
RBLBANK 13132800 12.04 361.55 (5.67)
Weekly change in OI
Technical and Derivatives Review | September 27, 2019
For Private Circulation Only
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Ruchit Jain Technical Analyst [email protected]lbroking.com
Rajesh Bhosale Technical Analyst rajesh.bhos[email protected]m
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Technical and Derivatives Review | September 27, 2019
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