Technical and Derivatives Review | August 31, 2018
11900 still very much on cards
Sensex (38645 ) / Nifty (11681)
Source: Trading View
Future outlook
The index continues to enjoy its Bull Run despite some in between hiccups. After previous week’s consolidation, we had a head start
on Monday by opening higher and in couple of days, hastening beyond milestones of 11600 and 11700. However, traders once again
chose to take some money off the table and hence, index came off a bit from higher levels thereafter. Although, we did not see a
significant move on Friday in terms of gains; it was quite encouraging because index managed to hold its ground and showed some
signs of recovery towards the fag end of the week.
If we compare the price activity of the week gone by and the previous one, we can clearly see it was quite identical in nature. On
both occasions, the beginning was good; but market struggled to sustain at higher levels. We would have interpreted this as a
caution if the damage was bigger. But since it’s not the case, we would rather construe this as a sign of strength considering the
small but crucial recovery on Friday. Since, the chart structure still does not show any weakness, we would continue with our
positive stance and would reiterate index heading towards 11900 quite soon. Before this, immediate resistances for the forthcoming
week can be seen at 11728 - 11760. On the flipside, this week’s low of 11639 would now play a major role. Some kind of weakness
or extended profit booking can only be witnessed after a breach of this crucial support. Till then one should keep following the
positive route map and focus on individual pockets that are providing better trading opportunities.
As far as sectoral moves are concerned, Pharma and Metal have been the outshining pockets and still we expect them to do well in
coming days. Apart from this, IT stocks gave some sparkling moves on the First and the last day of week. Do watch out for these
spaces along with the midcap universe (especially the cash segment), which is still likely to fetch some decent returns.
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Technical and Derivatives Review | August 31, 2018
Long Rollovers for the benchmark index
Nifty spot closed at 11680.50 this week, against a close of 11557.10 last week. The Put-Call Ratio has decreased from 1.63 to 1.55
and the annualized Cost of Carry is positive at 6.34%. The Open Interest of Nifty Futures decreased by 25.29%.
Derivatives View
Nifty current month future closed with a premium of 54.80 points against a premium of 53.75 points to its spot. Next month future
is trading with a premium of 93.60 points.
As far as Nifty options activities for the week are concerned, the overall build-up was quite scattered being start of new series. We
saw fresh build-up in 11700-12000 call and 11200-11700 put options. Maximum open interest for September series is placed at
11800 followed by 12000 call and 11600 followed by 11500 put options.
The benchmark index rallied almost 5% in the August series and we also witnessed decent rollovers. During the series, we saw good
amount of long formation in Nifty and these positions have also been carried forwarded to September series. Rollovers for Nifty
stood at 68.37%, in line with the 3-month average of 68.72%. Stronger hands (FIIs) added mixed positions throughout the August
series but preferred rolling only the positive bets. Their index futures ‘Long Short Ratio’ has been consistently rising series on series
from 35% to 58% in July series and now has climbed up to 64%, which dictates their positive stance on market. Considering the above
data, we expect continuation of ongoing rally towards 11800-11900; thus, traders are advised to keep adding longs on dips in market.
Long Formation
Short Formation
Chg (%)
Chg (%)
Chg (%)
Chg (%
Weekly change in OI
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Technical and Derivatives Review | August 31, 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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