August 29, 2015
Technical Picks |
Up move only a relief rally; some more pain still left
Sensex (27392) / Nifty (8002)
The Nifty started the proceedings for the week with a massive
Exhibit 1: Nifty Weekly chart
downside gap, owing to extremely negative global cues. The
index kept falling throughout the session to register a
humongous single day fall of nearly 6%. This was followed by
four extremely volatile sessions as the index managed to recover
smartly after posting an intra-week low of 7667.25 on Tuesday.
The bulls somehow could take a sigh of relief after the Nifty
having concluded the week above the 8000 mark. Barring the
Metal pack, all other sectors ended well inside the negative
territory amongst which the Healthcare, Auto, Oil & Gas,
Source: Falcon
Banking and Capital Goods sectors were the major draggers.
Exhibit 2: Nifty Daily chart
The Nifty ended yet another week with a sharp cut of 3.59%
over the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
27623 / 8364 and 25925 / 7811 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
27141 / 8232 and 27702 / 8386 levels, respectively.
Future outlook
Source: Falcon
The Nifty witnessed massive volatility throughout the week,
'89 EMA' on a closing basis, we are not so gung ho with this up
leaving many investors caught on the wrong side of the trade.
move. We are interpreting it as a relief rally and observing a
At the previous week's closing, the Nifty had given a hint by
strong resistance of a downside gap area (8225.05 to 8060)
breaking down from the four week congestion zone of 8650 to
created on Monday. Thus, we expect pessimism to continue in
8315 with a 'Breakaway Gap'. As a result, we were anticipating
the market and expect the Nifty to retest 7800 - 7670 levels.
weakness in the market; but Monday's fall was far beyond our
However, considering the extreme oversold condition of the daily
expectations. The Nifty opened on Monday with a humongous
'RSI-Smoothened' momentum oscillator, we may witness some
downside gap (can be termed as a 'Continuation Gap'), falling
time-wise correction rather than a price-wise pull back on the
in line with the carnage in equity markets across the globe.
upside. A possible formation of 'Lower Top Lower Bottom' on
There was no respite from the weakness as the session
the monthly chart along with the negative placement of the
proceeded and the Nifty went on to break the recent swing low
monthly 'RSI-Smoothened' supports our hypothesis. Traders can
of 7940. In the process, the Nifty on Monday registered the
use any bounce to lighten up existing longs and to create fresh
biggest single day fall in the last seven years. Fortunately, the
short positions. Having said that, we do not expect a similar
global episodes of extreme negativity condensed a bit and we
crack down on the lines of what we witnessed last Monday. The
witnessed a decent recovery, leading the Nifty to regain the
possibility of a gentle slide is quite high. At this juncture, it's
8000 mark on a weekly closing basis. Technically speaking,
advisable to trade with a proper exit strategy.
although the Nifty managed to successfully defend the weekly
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August 29, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,708
25,550
26,140
26,982
27,572
NIFTY
7,496
7,749
7,920
8,173
8,345
BANKNIFTY
16,252
16,732
17,151
17,631
18,050
ACC
1,284
1,324
1,359
1,398
1,434
AMBUJACEM
183
195
209
221
235
ASIANPAINT
784
821
849
886
915
AXISBANK
450
479
504
533
558
BAJAJ-AUTO
2,034
2,157
2,256
2,379
2,478
BANKBARODA
163
174
184
195
204
BHEL
202
218
231
247
259
BPCL
750
806
837
892
923
BHARTIARTL
319
341
354
376
389
BOSCH LIMITED
20,736
22,203
23,018
24,485
25,300
CAIRN
109
127
139
157
169
CIPLA
573
616
649
693
725
COALINDIA
318
338
352
372
387
DRREDDY
3,810
3,995
4,117
4,303
4,424
GAIL
234
261
285
313
336
GRASIM
3,248
3,349
3,464
3,565
3,679
HCLTECH
859
906
930
977
1,001
HDFCBANK
987
1,008
1,026
1,047
1,065
HDFC
1,048
1,125
1,170
1,247
1,293
HEROMOTOCO
2,273
2,336
2,427
2,490
2,582
HINDALCO
71
76
81
86
90
HINDUNILVR
825
840
860
875
895
ICICIBANK
258
271
280
293
302
IDEA
136
145
150
159
165
INDUSINDBK
800
824
854
878
908
INFY
1,013
1,062
1,093
1,142
1,174
ITC
306
317
323
334
340
KOTAKBANK
595
621
648
674
701
LT
1,507
1,562
1,630
1,685
1,753
LUPIN
1,617
1,739
1,837
1,959
2,057
M&M
1,153
1,193
1,246
1,286
1,339
MARUTI
3,835
4,021
4,223
4,409
4,612
NMDC
86
93
97
104
108
NTPC
100
111
118
129
136
ONGC
211
228
239
255
267
POWERGRID
120
127
133
141
146
PNB
129
136
145
152
161
RELIANCE
793
833
858
898
923
SBIN
231
240
249
258
267
SUNPHARMA
802
844
892
934
982
TCS
2,443
2,507
2,576
2,640
2,709
TATAMOTORS
287
314
328
355
369
TATAPOWER
49
55
61
67
73
TATASTEEL
187
208
221
242
256
TECHM
457
487
522
552
587
ULTRACEMCO
2,724
2,836
2,902
3,013
3,080
VEDANTA
69
83
91
105
113
WIPRO
510
537
555
582
601
YESBANK
549
613
659
723
769
ZEEL
330
359
376
405
422
Technical Research Team
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Derivatives Review |
FIIs forming Index longs; wait and watch
Nifty spot closed at 8001.95 this week against a close of 8299.95 last week. The Put-Call Ratio has increased from 0.88 to 0.99 levels
and the annualized Cost of Carry is positive at 3.51%. The Open Interest of Nifty Futures increased by 25.26%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.88 to 0.99 levels. Being start of
Implied Volatility (IV) for NIFTY has increased from 15.35% to
new series the build-up is quite scattered. Huge buildup was
22.02%. Historical volatility (HV) of NIFTY is at 32.04% and
visible in 7800-8500 call options last week. On the other hand
that for BANKNIFTY is trading at 41.19%. Liquid counters having
in put options good amount of OI addition was seen in 7400-
very high HV are BIOCON, PFC, NHPC, WOCKPHARMA and
7900 strikes. Maximum buildup in current series is seen in 8500
HEXAWARE. Stocks where HV are on lower side are
call & 7800 put options.
SRTRANSFIN, JINDALSTEL, ACC, AMTEKAUTO and
HEROMOTOCO.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 20.75 points
`2,59,696/- cr. to `1,86,410/- cr. Stock futures open interest
against a premium of 6.40 points to its spot. Next month future
has decreased from `70,695/- cr. to `56,522/- cr. Liquid
is trading with premium of 60.65 points. Liquid counters where
counters names which added significant positions last week
CoC is high are MARUTI, HINDUNILVR, AXISBANK,
are AMBUJACEM, LT, BHARTIARTL, BAJAJ-AUTO and TCS. On
HEROMOTOCO and SBIN. Stocks with negative CoC are
the other hand unwinding was visible in counters like
NMDC, POWERGRID, NTPC, BHEL and TATAMOTORS.
COALINDIA, CIPLA, KOTAKBANK, VEDL and BANKBARODA.
Derivative Strategy
Scrip : HINDALCO
CMP : `81.30
Lot Size : 2000
Exercise Date (F & O) :
27th. Aug 2015
View: Mildly Bullish
Strategy: Long Put
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
2000
HINDALCO
85
SEPT
CE
3.00
77
(`3.00)
BEP
-
`88.00
82
(`3.00)
87
(`1.00)
Max. Risk: `6,000/-
Max. Profit: Unlimited
If HINDALCO closes on or below strike price on expiry.
If HINDALCO continues to move above BEP.
92
`4.00
97
`9.00
NOTE: Profit can be booked before expiry if HINDALCO moves in favorable direction and time value decays.
102
`14.00
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