Technical Picks | May 28, 2016
The 8000 wall finally collapses; rally likely to extend
Sensex (26654) / Nifty (8157)
Trading for the week began on Monday with a mildly
Exhibit 1: Nifty Weekly chart
negative bias as the Nifty corrected a bit to test the 7720
mark. This was followed by yet another muted session on
Tuesday, but the intraday bias was positive. On Wednesday,
the Nifty opened with a decent upside gap in reaction to
extremely positive cues from its global peers. The
momentum accelerated as the day progressed and in the
process, the index went on to post a strong rally of 2.40%.
This optimism continued for the remaining part of the week
and as a result, the Nifty closed at the highest level in 2016.
This mesmerizing rally resulted in the Nifty posting a
whopping weekly gain of 5.25%.
Key Moving Averages:
Source: Company, Angel Research
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
25263
/
7719 and
Exhibit 2: Nifty Daily chart
25585 / 7759 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
25588
/
7868 and
25327 / 7741 levels, respectively.
Future outlook
It was a remarkable week for our markets as we witnessed
the second biggest weekly gains in the calendar year 2016.
In fact, the Nifty soared by more than 400 points in the last
three trading sessions leaving most traders clueless. We are
pleased that the market moved in line of our anticipation as
we had expressed in our previous weekly report towards
Source: Company, Angel Research
maintaining a positive stance despite unfavourable moves
that the market was undergoing. We expected a strong
After such a sharp move, it would be difficult for those who
bounce after the Nifty entering the 9th time zone of
have missed this move to initiate fresh positions in the index
‘34 Days’ on Monday as per the ‘Fibonacci Time Series’ and
considering the risk - reward ratio. But there is still room to
the market proved us right by trading accordingly. The Nifty
earn by concentrating on individual stocks which may now
has now confirmed a breakout from the ‘Inverse Head and
offer potential trades on the long side.
Shoulder’ pattern and thus, we expect this momentum to
continue towards the next major resistance of 8336. On the
downside, if we go by the ‘Change of Polarity’ rule, the
neckline level of 8000 - 7950 would now act as a strong
support zone. We reiterate that traders shouldn't be
expecting any immediate reversal in the ongoing upward
momentum because given the strong optimism that the
market is riding on, there is a tendency of even minor
intraday dips getting bought into.
For Private Circulation Only
1
Technical Picks | May 28, 2016
Weekly Pivot Levels For Nifty Constituents
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,675
25,664
26,171
27,160
27667
NIFTY
7,564
7,860
8,012
8,309
8461
NIFTY BANK
15,966
16,739
17,141
17,914
18316
ACC
1,340
1,432
1,483
1,576
1626
ADANIPORTS
172
182
187
198
203
AMBUJACEM
201
215
224
239
247
ASIANPAINT
920
958
980
1,018
1040
AUROPHARMA
684
724
752
791
819
AXISBANK
464
489
507
532
550
BAJAJ-AUTO
2,286
2,425
2,503
2,642
2721
BANKBARODA
123
131
136
144
148
BHEL
109
118
125
135
142
BPCL
827
916
970
1,059
1114
BHARTIARTL
334
343
350
359
366
INFRATEL
365
375
386
397
408
BOSCH
19,862
20,881
21,544
22,563
23226
CIPLA
428
451
480
503
533
COALINDIA
274
278
281
285
288
DRREDDY
2,967
3,041
3,090
3,164
3213
EICHERMOT
17728
18235
18517
19024
19306
GAIL
354
367
378
391
402
GRASIM
4,119
4,240
4,313
4,434
4506
HCLTECH
719
739
749
768
779
HDFCBANK
1,113
1,150
1,170
1,207
1227
HDFC
1,116
1,183
1,226
1,293
1336
HEROMOTOCO
2,817
2,906
2,958
3,047
3,099
HINDALCO
80
86
89
95
99
HINDUNILVR
794
827
847
880
900
ICICIBANK
209
225
237
253
265
IDEA
101
107
111
117
121
INDUSINDBK
1,012
1,058
1,085
1,131
1,158
INFY
1,145
1,195
1,227
1,277
1,309
ITC
330
345
354
369
379
KOTAKBANK
674
708
727
761
779
LT
1,131
1,303
1,395
1,567
1659
LUPIN
1,394
1,437
1,486
1,529
1578
M&M
1,216
1,275
1,318
1,377
1421
MARUTI
3,798
3,973
4,067
4,241
4336
NTPC
132
136
139
143
147
ONGC
196
205
213
221
230
POWERGRID
142
146
149
154
157
RELIANCE
908
941
959
993
1010
SBIN
154
178
190
214
226
SUNPHARMA
751
788
808
845
865
TCS
2,417
2,495
2,537
2,615
2658
TATAMTRDVR
253
262
268
277
283
TATAMOTORS
371
388
396
413
421
TATAPOWER
68
70
73
75
77
TATASTEEL
304
317
324
337
345
TECHM
433
485
516
567
598
ULTRACEMCO
3,060
3,154
3,204
3,299
3349
WIPRO
529
537
544
552
559
YESBANK
942
984
1,013
1,054
1083
ZEEL
423
438
447
462
470
Technical Research Team
For Private Circulation Only
2
Derivatives Review | May 28, 2016
FIIs formed huge longs, stay positive.
Nifty spot closed at 8156.65 this week, against a close of 7749.70 last week. The Put-Call Ratio has increased from 0.83 to 0.99
levels and the annualized Cost of Carry is positive at 2.08%. The Open Interest of Nifty Futures increased by 12.89%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.83 to 0.99 levels. In June
Implied Volatility (IV) for NIFTY has decreased from
series, we witnessed good build-up in 8400 - 8600 call
14.65% to 13.63%. Historical volatility (HV) of NIFTY is at
options. We believe that most of them are long positions.
20.33% and that for BANKNIFTY is at 25.29%. Liquid
While in put options, 8100 - 7900 added huge fresh
counters having very high HV are LT, HINDPETRO,
positions. Maximum OI in current series is visible in 8200
SUNPHARMA, BPCL and TECHM. Stocks where HV are on
call and 8000 put options.
lower side are RECLTD, TITAN, PFC, COALINDIA and
LUPIN.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 15.80
`2,46,929/- cr. to `1,88,116/- cr. Stock futures open
points against a premium of 18.25 points to its spot. Next
interest has decreased from `63,083/- cr. to `60,331/- cr.
month future is trading with premium of 35.35 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are TATAPOWER,
week are BPCL, M&M, CIPLA, TATAMTRDVR and
BANKBARODA, HINDALCO, TATAMTRDVR and GRASIM.
BOSCHLTD. On the other hand unwinding was visible in
Stocks with negative CoC are ICICIBANK, ITC, SBIN,
counters like
HEROMOTOCO, IDEA, HCLTECH,
HINDUNILVR and BPCL.
BANKBARODA and EICHERMOT.
Derivative Strategy
Scrip: TCS
CMP : ` 2568.00/-
Lot Size : 200
Exercise Date (F & O) :
30th June 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
200
TCS
2600
JUNE
CE
40.00
2550
(`14.00)
SELL
400
TCS
2700
JUNE
CE
13.00
2600
(`14.00)
LBEP - ` 2614/-
UBEP - ` 2786/-
2650
`36.00
2700
`86.00
Max. Risk: Unlimited
Max. Profit: `17,200/-
If TCS continues to move above UBEP.
If TCS closes at 2700 level on expiry.
2750
`36.00
NOTE: Profit can be booked before expiry if TCS moves in favourable direction.
2800
(`14.00)
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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