Technical and Derivatives Review | September 28, 2018
Index reluctant to give any bounce; avoid aggressive positions
Sensex (36227) / Nifty (10930)
Source: Trading View
Future outlook
Last week’s massive destruction was followed by some sort of respite in benchmark; but the carnage in the broader market still
continued. In the week gone by, Nifty vacillated in a range of nearly 250 - 300 points and the bias remained extremely weak for the
major part. Eventually, a modest recovery towards the fag end of the week resulted into a close tad above the 10900 mark.
Whatever we witnessed in the last couple of weeks is a classic example of market correction. When it begins, whatever the reason
be, it just remains reluctant to give any kind of minor bounce also. Such periods can be scary not only for traders but also for
investors. As far as levels are concerned, index is trading around key levels i.e. ‘200 SMA’ placed at 10800-10770. It would be
important to see how index behaves around it and at the same time, in the upward direction, 11000 followed by 11140 are the
levels to watch out for. In our sense, traders need to be light on positions and should ideally wait for clear trend to emerge to form
aggressive positions.
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Technical and Derivatives Review | September 28, 2018
Rising VIX hints signs of caution
Nifty spot closed at 10930.45 this week, against a close of 11143.10 last week. The Put-Call Ratio has increased from 1.14 to 1.33
and the annualized Cost of Carry is positive at 2.95%. The Open Interest of Nifty Futures decreased by 32.33%.
Derivatives View
Nifty current month future closed with a premium of 23.85 points against a premium of 64.50 points to its spot. Next month future
is trading with a premium of 71.45 points.
As far as Nifty options activities for the week are concerned, being start of the new series the overall build-up remained quite
scattered between 11000-11700 call and 10500-11000 put options. Maximum open interest for October series now stood at 11500
followed by 11200 call and 10800 followed by 10500 put options.
The benchmark index corrected almost 6% in the September series to conclude tad below the important psychological level of
11000. Despite being a volatile series, we hardly saw any meaningful open interest addition in Nifty futures; in fact, OI plunged 30% series
on series. Rollovers for Nifty stood at 62.51%, lower than the 3-month average of 68.21%. Stronger hands (FIIs) added short positions
throughout the September series and also preferred rolling these bearish bets in the coming series. Due to the sharp decline in index; the
volatility index has also surged above the hurdle of 16.50 and this certainly does not bode well for the bulls. Considering the rollover data,
it’s advisable to stay light in index unless we see any relevant build-up in either direction
Long Formation
Short Formation
Chg (%)
Chg (%)
Chg (%)
Chg (%
Weekly change in OI
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Technical and Derivatives Review | September 28, 2018
Technical and Derivatives Team:
Sameet Chavan
Chief Analyst - Technical & Derivatives
[email protected]
Ruchit Jain
Technical Analyst
[email protected]
Rajesh Bhosale
Technical Analyst
[email protected]
Sneha Seth
Derivatives Analyst
[email protected]
Research Team Tel: 022 - 39357600
For Technical Queries
E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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