1
For Private Circulation Only
Technical and Derivatives Review | February 29, 2020
Terrible week for financial markets, 11000 last ray of hope
Sensex (38297) / Nifty (11202)
Source: Trading View
Future outlook
It’s been a week of distress, intimidation and a lot of uncertainties for all equity markets across the globe. Until last week, probably no one
had sensed how massive the overall adverse effect of Coronavirus would be. The moment it started spreading rapidly outside the China,
things became worse and this eventually resulted into a complete meltdown in global markets. For us, on Thursday, there was some hope
of revival seen but with Friday’s huge gap down followed by sustained selling poured complete water on it. Eventually, we concluded by
registering biggest weekly cut after 2008.
There was no respect shown for any major support as we saw breaching of crucial points one after another. Honestly speaking, no analysis
works in such kind of fearsome environment. Although, the next path of action is solely depended on further developments with respect to
coronavirus; but still let us see where we are standing now and what are the next key levels to watch. At present, we are placed precisely at
the 161% retracement of recent up move from 11614.50 to 12246.70. In case if slides further, then the last ray of hope would be the lower
end of multi-year ‘Upward Sloping Channel’ placed at 11000. On the upside, Friday’s huge gap area of 11384.80 – 11536.70 remains to be
an immediate hurdle. In our sense, if any sustainable recovery has to happen in the forthcoming week, it should be a v-shaped or steep in
nature. If that doesn’t happen and if the recovery is gradual, that would be an ominous sign for the bulls.
Momentum traders are advised to stay light and should avoid leveraged positions in such kind of global uncertainty. But having said that
historically it’s proven, such panics generally offers very good opportunity for investors who are willing to build their portfolio. Hence, one
should start nibbling into quality propositions.
2
For Private Circulation Only
Technical and Derivatives Review | February 29, 2020
Stronger hands seen shorting aggressively
Nifty spot closed at 11201.75 this week, against a close of 12080.85 last week. The Put-Call Ratio has decreased from 1.12 to 1.10.
The annualized Cost of Carry is negative at 6.35%. The Open Interest of Nifty Futures has increased by 16.35%.
Derivatives View
Nifty current month future closed with a discount of 52.6 points against a premium of 12.80 points to its spot. Next month future is
trading with a discount of 10.55 points.
As far as Nifty options activities for the week are concerned, we saw fresh build-up in 11500-12000 call options. On the flip side,
some open interest addition was seen in 11000 put. Maximum open interest for the monthly series now stands at 11000 put and
12000 call options.
During the week, the indices corrected sharply with good amount of short formations. The rollover during the expiry was better than
average indicating short positions were rolled into. While FII’s have sold aggressively in the cash segment during the week, they
were sellers in the index futures segment too. They rolled much of their short position during expiry and now about 87% of their
positions in index futures are on the short side. The INDIA VIX has risen sharply during the week and has ended above 23 levels as
the markets corrected. On options front, 11000 put in the weekly as well as monthly expiry has highest open interest, indicating
support for Nifty around that level. On the flipside, the open interest in call options is scattered from 11400-12000. Looking at the
above data, it seems that the index would continue to trade with higher volatility wherein the short covering moves if any would
also be sharp and thus it could be difficult to trade with limited risk on both the sides. During such volatile times, its better to stay
light and let the volatility to cool down before taking any directional bets.
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
Weekly change in OI
Short Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg (%)
AMARAJABAT 2079200 26.53 637.65 (17.46)
MGL 2604000 23.58 995.35 (11.96)
BAJAJ-AUTO 1999500 21.07 2770.80 (9.67)
EICHERMOT 279360 9.59 16588.55 (11.92)
3
For Private Circulation Only
Technical and Derivatives Review | February 29, 2020
Research Team Tel: 022 - 39357600 Website: www.angelbroking.com
For Technical Queries E-mail: technicalresearch-cso@angelbroking.com
For Derivatives Queries E-mail: derivatives.desk@angelbroking.com
DISCLAIMER
Angel Broking Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL
and Portfolio Manager and Investment Adviser with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel
Broking Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide
registration number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory
authority for accessing /dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed
or co-managed public offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate
the contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this
report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we
cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this
document. While Angel Broking Limited endeavors to update on a reasonable basis the information discussed in this material, there
may be regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Technical and Derivatives Team:
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelbroking.com
Ruchit Jain Technical Analyst ruchit.jain@angelbroking.com
Sneha Seth Derivatives Analyst sneha.seth@angelbroking.com
4
For Private Circulation Only
Technical and Derivatives Review | February 29, 2020
Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or
in connection with the use of this information.