Technical Picks | January 30, 2016
Avoid shorting - Nifty support now shifted to 7400
Sensex (24871) / Nifty (7564)
Trading for the week gone by began slightly higher owing to
Exhibit 1: Nifty Weekly chart
positive global cues. However, a late sell-off in the broader
market erased major portion of morning gains one day
ahead of Republic Day. On Wednesday, the Nifty opened on
a subdued note and remained range bound within merely
60 points throughout the session to conclude on a flat note.
This was followed by yet another lethargic day despite
January series derivative expiry. The concluding session of
the week opened tad lower on the back of weak 3QFY2016
numbers from couple of index heavyweights. However, this
pessimism was very short lived as first we witnessed
complete recovery from lows and then a massive intraday
rally to end the week well inside the positive territory. As a
Source: Company, Angel Research
result, the Nifty ended the week with a decent gain of 1.78%
over the previous week’s closing.
Exhibit 2: Nifty Daily chart
Pattern formation:
The ’89-day EMA’ and the ’89-week EMA’ for the
Sensex/Nifty are placed at
25838
/
7805 and
25875 / 7816 levels, respectively.
The ’20-day EMA’ and the ‘20-week EMA’ for the
Sensex/Nifty are placed at
24887
/
7527 and
25797 / 7820 levels, respectively.
Future outlook
Source: Company, Angel Research
A modest recovery in the previous week (from recent lows)
was followed by three muted sessions in the last week of
This pattern is proving its significance now. The Nifty has
January month. However, Friday’s session dictated the trend
moved towards our mentioned levels of 7550 - 7600 and
for the week as we witnessed a good buying interest across
now, considering the positive placement of the ‘RSI-
the broader market to end the session well above the 7500
Smoothened’ oscillator on the daily chart, we expect this
mark. Our recent strategy of covering short positions near
move to extend further towards 7650 - 7700 levels (61.8%
7300 and buying in some of the heavyweight propositions
retracement of the recent fall from 7972.55 to 7241.50).
has certainly played out well. We have been mentioning
On the flipside, the immediate support has now shifted
about the ‘Falling Wedge’ on the weekly chart since last
higher to 7400. We maintain our view that traders should
couple of weeks. Last week, Nifty managed to find a very
refrain from shorting and rather, should focus on stock
good support around the lower end of the pattern and went
specific long ideas with a proper exit strategy.
on to form a ‘Dragonfly Doji’ pattern.
For Private Circulation Only
1
Technical Picks | January 30, 2016
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
24,145
24,508
24,710
25,073
25,275
NIFTY
7,341
7,452
7,514
7,625
7,687
NIFTY BANK
14,902
15,212
15,447
15,758
15,993
ACC
1,182
1,211
1,237
1,266
1,293
ADANIPORTS
196
204
215
223
234
AMBUJACEM
187
191
195
200
204
ASIANPAINT
838
854
868
884
898
AXISBANK
374
391
410
428
447
BAJAJ-AUTO
2,215
2,278
2,319
2,383
2,423
BANKBARODA
117
121
127
131
138
BHEL
127
133
142
148
157
BPCL
841
867
887
913
932
BHARTIARTL
272
281
291
300
310
BOSCH
16,519
17,007
17,344
17,832
18,169
CAIRN
105
114
122
130
138
CIPLA
563
574
583
594
603
COALINDIA
288
304
314
330
341
DRREDDY
2,796
2,951
3,035
3,190
3,275
GAIL
342
355
364
377
386
GRASIM
3,236
3,315
3,400
3,479
3,564
HCLTECH
815
840
855
881
895
HDFC
1,020
1,035
1,045
1,060
1,070
HDFCBANK
1,118
1,149
1,169
1,200
1,219
HEROMOTOCO
2,357
2,461
2,536
2,640
2,714
HINDALCO
66
68
71
73
76
HINDUNILVR
748
782
801
836
855
ICICIBANK
209
220
230
240
250
IDEA
97
100
105
108
114
INDUSINDBK
860
894
915
949
970
INFY
1,108
1,136
1,153
1,182
1,199
ITC
295
308
317
329
339
KOTAKBANK
651
667
677
693
702
LT
1,022
1,062
1,110
1,150
1,198
LUPIN
1,625
1,668
1,703
1,745
1,780
M&M
1,118
1,176
1,208
1,265
1,298
MARUTI
3,810
3,953
4,066
4,209
4,322
NTPC
131
137
142
147
152
ONGC
211
218
223
231
236
POWERGRID
125
137
143
154
160
PNB
85
88
91
95
98
RELIANCE
981
1,008
1,024
1,051
1,067
SBIN
172
176
182
186
193
SUNPHARMA
765
819
848
902
932
TCS
2,240
2,315
2,358
2,434
2,476
TATAMOTORS
314
326
336
347
357
TATAPOWER
58
59
61
62
64
TATASTEEL
240
245
252
257
265
TECHM
475
488
506
519
537
ULTRACEMCO
2,670
2,755
2,804
2,889
2,937
VEDL
60
66
69
75
79
WIPRO
535
549
557
571
580
YESBANK
617
682
716
780
814
ZEEL
379
399
411
432
444
Technical Research Team
For Private Circulation Only
2
Derivatives Review | January 30, 2016
Next resistance is around 7700
Nifty spot closed at 7563.55 this week, against a close of 7422.45 last week. The Put-Call Ratio has increased from 0.86 to 0.89
levels and the annualized Cost of Carry is positive at 0.80%. The Open Interest of Nifty Futures decreased by 14.85%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.86 to 0.89 levels due to open
Implied Volatility (IV) for NIFTY has decreased from
interest addition in put options. In call options, 7500-7700
16.24% to 15.10%. Historical volatility (HV) of NIFTY is at
strikes added good amount of OI. While in put options,
20.20% and that for BANKNIFTY is at 25.73%. Liquid
7200-7500 strikes added huge build-up. Maximum
counters having very high HV are TITAN, SRTRANSFIN,
build-up in current series is seen in 7600 call options and
POWERGRID, YESBANK and DIVISLAB. Stocks where HV
7300 put options.
are on lower side are IFCI, VOLTAS, KSCL, MARUTI and
RPOWER.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 4.50
`2,56,957/- cr. to `1,77,409/- cr. Stock futures open
points against a premium of 20.65 points to its spot. Next
interest has decreased from `61,531/- cr. to `58,117/- cr.
month future is trading with premium of 18.20 points.
Large cap names which added significant positions last
Liquid counters where CoC is high are IDFC, TATAPOWER,
week are MARUTI, BPCL, INDUSINDBK, TECHM and ZEEL.
CIPLA, JINDALSTEL and DLF. Stocks with negative CoC are
On the other hand unwinding was visible in counters like
NMDC, GAIL, BPCL, ULTRACEMCO and ICICIBANK.
NMDC, NTPC, PNB, AMBUJACEM and TATASTEEL.
Derivative Strategy
Scrip: BHEL
CMP : `138.95
Lot Size : 2000
Exercise Date (F & O) :
25th Feb 2016
View: Mildly Bullish
Strategy: Bull Call Spread
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(`)
(`)
Profit/Loss
BUY
2000
BHEL
140
FEB
CE
6.50
132
(`3.50)
SELL
2000
BHEL
150
FEB
CE
3.00
137
(`3.50)
BEP - `143.50
142
(`1.50)
Max. Risk: `7,000
Max. Profit: `13,000
147
`3.50
If BHEL closes on or below `140 levels on expiry.
If BHEL closes on or above `150 levels on expiry.
152
`6.50
NOTE: Profit can be booked before expiry if BHEL moves in favorable directions and time value decays.
157
`6.50
For Private Circulation Only
3
Research Team Tel: 022 - 39357800
E-mail: [email protected]
Website: www.angelbroking.com
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