October 31, 2015
Technical Picks |
Nifty range shifted lower - 8000 now a crucial support
Sensex (26657) / Nifty (8066)
Trading for the week started off with a minor upside gap opening
Exhibit 1: Nifty Weekly chart
on Monday, citing favorable global cues. The lead was however
short lived as the Nifty started correcting immediately after the
opening. This was followed by two sessions of gap-down
openings, and the intraday movement was very narrow and
lethargic on these days. The remaining sessions saw the bears
take convincing control of the market and the Nifty dipped well
below the 8100 mark. Barring nominal gains in Consumer
Durables, all other sectors concluded the week well inside the
negative territory, The Banking, Capital Goods, FMCG and Oil
Source: Falcon
& Gas stocks were among the ones to witness relatively higher
Exhibit 2: Nifty Daily chart
declines. Eventually, the Nifty ended the week with a sharp cut
of 2.96% over the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
26957 / 8168 and 26018 / 7848 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
26909 / 8143 and 27017 / 8184 levels, respectively.
Future outlook
Source: Falcon
Post the recent Reserve Bank of India (RBI) Monetary Policy; it is
The Nifty is now entering a strong support zone of 8055
the first time that the Nifty posted a weekly loss, i.e. after a
(previous resistance) - 8000 (the lower end of the 'Channel'
decent rally of four weeks. Such corrections are a part of market
pattern). Thus, going forward, 8000 has become a major
behaviour; but there is a reason for the bulls to be alarmed as
support in the near term. A breach of this support may trigger
the Nifty, in the concluded week, has conceded 50% of its gains
pessimism in the market, which may result in a continuation of
achieved in the previous four weeks. In our previous report, we
this downward move towards 7850 - 7800 levels. On the higher
had clearly mentioned about the stiff resistance zone of
side, in case of an intra-week bounce, 8180 - 8250 is likely to
8322 - 8360, coinciding with a 'Rising Channel' pattern, and a
act as a strong resistance for the Nifty. It's advisable not to
'Gap Area' that was created on August 21, 2015. These technical
trade aggressively on the long side and follow strict stop losses
evidences acted as a major barrier for the bulls and thus, we
for existing positions.
witnessed a decent profit booking throughout the week.
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October 31, 2015
Technical Picks |
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
S2
S1
PIVOT
R1
R2
SENSEX
25,920
26,289
26,953
27,322
27,986
NIFTY
7,857
7,961
8,149
8,253
8,441
BANKNIFTY
16,659
17,007
17,518
17,866
18,377
ACC
1,350
1,365
1,386
1,401
1,422
ADANIPORTS
280
288
303
311
325
AMBUJACEM
199
203
207
211
214
ASIANPAINT
796
813
829
846
861
AXISBANK
423
449
491
517
559
BAJAJ-AUTO
2,490
2,520
2,560
2,590
2,630
BANKBARODA
150
155
165
170
180
BHEL
184
191
205
213
227
BPCL
830
851
886
906
942
BHARTIARTL
332
341
353
361
374
BOSCH
19,372
19,915
20,941
21,484
22,511
CAIRN
147
150
155
158
163
CIPLA
657
674
689
706
722
COALINDIA
302
311
328
337
354
DRREDDY
3,957
4,118
4,242
4,403
4,527
GAIL
289
299
315
325
341
GRASIM
3,558
3,635
3,697
3,774
3,836
HCLTECH
839
855
870
887
902
HDFC
1,071
1,085
1,105
1,119
1,138
HDFCBANK
1,181
1,219
1,284
1,322
1,388
HEROMOTOCO
2,516
2,549
2,596
2,629
2,677
HINDALCO
81
82
85
86
89
HINDUNILVR
780
790
805
816
831
ICICIBANK
258
267
279
288
299
IDEA
137
138
141
142
145
INDUSINDBK
864
888
926
950
989
INFY
1,113
1,124
1,141
1,153
1,170
ITC
313
324
342
353
371
KOTAKBANK
639
664
679
703
718
LT
1,317
1,364
1,447
1,494
1,577
LUPIN
1,758
1,844
1,970
2,056
2,182
M&M
1,119
1,151
1,206
1,238
1,293
MARUTI
4,278
4,364
4,461
4,547
4,644
NTPC
122
128
133
138
143
ONGC
233
240
250
257
268
POWERGRID
120
124
131
135
141
PNB
122
125
131
134
140
RELIANCE
914
931
947
964
980
SBIN
222
229
243
250
264
SUNPHARMA
856
873
893
909
929
TCS
2,446
2,470
2,510
2,534
2,574
TATAMOTORS
373
379
388
394
403
TATAPOWER
66
68
70
71
73
TATASTEEL
238
242
248
253
259
TECHM
523
531
544
552
564
ULTRACEMCO
2,771
2,828
2,887
2,944
3,003
VEDL
93
97
101
105
109
WIPRO
558
565
573
581
589
YESBANK
679
719
747
787
816
ZEEL
386
397
417
429
449
Technical Research Team
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Derivatives Review |
Nifty has strong support around 7800-7850
Nifty spot closed at 8065.80 this week against a close of 8295.45 last week. The Put-Call Ratio has decreased from 1.06 to 0.86
levels and the annualized Cost of Carry is positive at 4.84%. The Open Interest of Nifty Futures decreased by 18.10%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has decreased from 1.06 to 0.86 levels. In call options,
Implied Volatility (IV) for NIFTY has increased from 11.33% to
8200 and 8400 strikes added good amount of OI, followed by
16.40%. Historical volatility (HV) of NIFTY is at 16.78% and
unwinding in out of the money calls 8600-8800 strikes. While
that for BANKNIFTY is trading at 25.93%. Liquid counters having
in put options, we hardly saw any strike adding meaningful
very high HV are TVSMOTOR, BHARATFORG, AXISBANK,
build-up, some unwinding was visible in 8300 put options.
GLENMARK and APOLLOTYRE. Stocks where HV are on lower
Maximum buildup in current series is seen in 8500 call & 8000
side are IDEA, SRTRANSFIN, TATASTEEL, HCLTECH and INFY.
put options.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has decreased from
Nifty current month futures closed at a premium of 28.90 points
`2,42,333/- cr. to `1,79,446/- cr. Stock futures open interest
against a premium of 8.70 points to its spot. Next month future
has decreased from `62,938/- cr. to `58,369/- cr. Liquid
is trading with premium of 70.05 points. Liquid counters where
counters names which added significant positions last week
CoC is high are ICICIBANK, TATAPOWER, BANKBARODA,
are LT, INDUSINDBK, KOTAKBANK, JINDALSTEL and
POWERGRID and ITC. Stocks with negative CoC are NMDC,
AXISBANK. On the other hand unwinding was visible in counters
ONGC, GAIL, TATAMOTORS and BATAINDIA.
like CAIRN, ONGC, HINDUNILVR, TATAMOTORS and
BAJAJ-AUTO.
Derivative Strategy
Scrip : RELIANCE
CMP : `951.25
Lot Size : 500
Exercise Date (F & O) :
26th. Nov 2015
View: Range Bound
Strategy: Short Strangle
Expected Payoff
Buy/Sell
Qty
Scrip
Strike
Series
Option
Buy/Sell Rate
Closing Price
Expected
Price
Type
(Rs)
(Rs)
Profit/Loss
SELL
500
RELIANCE
980
NOV
CE
12.00
885
(`25.00)
SELL
500
RELIANCE
940
NOV
PE
18.00
915
`5.00
LBEP
-
`910/-
945
`30.00
UBEP - `1010/-
975
`30.00
Max. Risk: Unlimited
Max. Profit: `15,000/-
If RELIANCE continues to move above UBEP or below LBE
If RELIANCE closes between two strike prices on expiry.
1005
`5.00
1035
(`25.00)
NOTE: Profit can be booked before expiry if RELIANCE remains range bound and time value decays.
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Research Team Tel: 022 - 39357800
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