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Technical Picks | April 16, 2016

 

Trading for the week gone by started off with Monday’s

session opening with an upside gap, although marginal. The

Nifty then remained slightly under pressure in the first half

but a sudden bout of strength post the mid-session pulled

the index well above the day’s lows, taking many by 

surprise. This momentum accelerated as the week

progressed and in the process the Nifty convincingly broke

its recent swing high of 7777.60 on the way through. The up

move was mainly propelled by Auto, Banking and IT

counters. Eventually, the Nifty concluded the week’s

proceedings with a handsome gain of 3.91% over the

previous week’s closing.

Pattern formation:

  The ’89-day EMA’ and the ’89-week EMA’ for the

Sensex/Nifty are placed at 24928 / 7587  and

25578 / 7743 levels, respectively.

  The ’20-day EMA’ and the ‘20-week EMA’ for the

Sensex/Nifty are placed at 24966 / 7625  and25054 / 7628 levels, respectively.

Future outlook

The Nifty posted reasonably strong weekly gains, despite it

being a truncated week; mainly drawing impetus from IMD’s

forecast of an above-normal monsoon this year. We accept

the fact that the concluded week’s move was slightly 

surprising to us as we had hinted at the likelihood of a

contrary move in our previous weekly report. The up move

has come sooner than we had expected as we had

estimated the Nifty to first test the 7480  mark and then

assume bullishness. The surge we witnessed was on the back

of a lot of positive news flow on the domestic as well as the

global front which led the Nifty to reverse after posting a low

of 7516.85.  Although this move started a bit early, we

should give due respect to this price development. Thus,

traders are advised not to stay in the opposite direction until

we see any reversal signs. Technically speaking, traders

should now keep a watch on the important technical

evidence, ie the ‘200 SMA’ placed at 7875. Ideally, looking

at the concluded week’s momentum, the Nifty should beable to surpass this hurdle with ease. Historically, this

technical tool has proved its significance time and again.

Exhibit 1: Nifty Weekly chart

 Source: Company, Angel Research

Exhibit 2: Nifty Daily chart

 Source: Company, Angel Research

Thus, we advise traders to keep booking profits in the zone

of 7875 – 7925 and then wait for further developments on

the charts to confirm the near term direction. On the flipside,

7778 – 7660  would now be seen as immediate support

levels. Meanwhile, we expect stock specific movements to

continue in the market and hence, traders should look out

for such potential opportunities.

Nifty nearing 200 SMA – a level to watch 

Sensex (25627) / Nifty (7850) 

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Weekly Pivot Levels For Nifty Constituents

SCRIPS 

S2 S1 PIVOT R1 R2

SENSEX 24,126 24,876 25,274 26,024 26,422NIFTY 7,396 7,623 7,744 7,971 8,092

NIFTY BANK 15,113 15,696 16,023 16,605 16,932

 ACC 1,407 1,439 1,457 1,488 1,506

 ADANIPORTS 211 222 230 241 249

 AMBUJACEM 217 224 228 235 239

 ASIANPAINT 831 853 864 886 898

 AUROPHARMA 733 759 777 804 822

 AXISBANK 407 424 434 451 462

BAJAJ-AUTO 2,282 2,432 2,523 2,674 2,765

BANKBARODA 139 146 150 157 161

BHEL 118 126 131 138 143

BPCL 873 899 920 946 966

BHARTIARTL 329 340 352 364 376INFRATEL 353 369 385 401 417

BOSCH 18,501 19,265 19,757 20,522 21,014

CIPLA 490 501 508 519 526

COALINDIA 266 272 277 283 288

DRREDDY 2,945 3,022 3,072 3,150 3,200

EICHERMOT 18653 19275 19621 20243 20589

GAIL 333 351 362 380 391

GRASIM 3,831 3,952 4,036 4,157 4,241

HCLTECH 814 826 836 848 858

HDFCBANK 1,028 1,055 1,070 1,097 1,112

HDFC 1,040 1,078 1,098 1,135 1,155

HEROMOTOCO 2,813 2,980 3,076 3,244 3,340

HINDALCO 84 90 94 100 104HINDUNILVR 826 862 881 917 935

ICICIBANK 210 225 235 250 260

IDEA 105 110 113 118 121

INDUSINDBK 915 950 972 1,008 1,030

INFY 1,129 1,151 1,173 1,195 1,217

ITC 311 321 327 337 343

KOTAKBANK 645 668 684 708 724

LT 1,157 1,196 1,225 1,263 1,292

LUPIN 1,472 1,510 1,540 1,578 1,607

M&M 1,158 1,245 1,297 1,385 1,437

MARUTI 3,311 3,521 3,633 3,844 3,956

NTPC 129 133 135 140 142

ONGC 201 207 211 217 222

POWERGRID 139 142 144 147 148

RELIANCE 1,019 1,043 1,056 1,080 1,093

SBIN 177 185 189 196 201

SUNPHARMA 799 816 826 843 853

TCS 2,363 2,444 2,495 2,576 2,627

TATAMTRDVR 267 284 292 309 317

TATAMOTORS 360 385 398 422 436

TATAPOWER 64 67 69 72 73

TATASTEEL 311 322 329 340 347

TECHM 443 457 465 479 487

ULTRACEMCO 3,068 3,171 3,243 3,346 3,418

 WIPRO 523 554 573 604 623

YESBANK 837 854 864 881 891

 ZEEL 377 390 400 412 422

Technical Research Team

Technical Picks | April 16, 2016

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Derivatives Review  | April 16, 2016

Market surprised with fresh longs in Index. 

Nifty spot closed at 7850.45 this week, against a close of 7555.20 last week. The Put-Call Ratio has increased from 0.76 to 0.99 

levels and the annualized Cost of Carry is positive at 5.39 . The Open Interest of Nifty Futures increased by 6.64 .

Put-Call Ratio Analysis Implied Volatility Analysis

PCR-OI has decreased from 0.76 to 0.99 levels due to

significant build-up in put options. In call options, we hardly

saw any strike adding meaningful build-up, good amount

of unwinding was visible in 7600-8000 strikes. While in put

options, 7700 & 7800 strikes were quite active and they

also added huge build-up. Maximum build-up in current

series is seen in 8000 call and 7000 put options.

Implied Volatility (IV) for NIFTY has slightly decreased from

13.86% to 13.10%. Historical volatility (HV) of NIFTY is at

21.60% and that for BANKNIFTY is at 29.26%. Liquid

counters having very high HV are TATACHEM, M&M,

 WIPRO, BAJAJ-AUTO and DABUR. Stocks where HV are on

lower side are LICHSGFIN, APOLLOTYRE, DIVISLAB,

JPASSOCIAT and IOC.

Open Interest Analysis Cost-of-Carry Analysis

Total open interest of market has increased from

 ` 1,98,794/- cr. to  ` 2,13,851/- cr. Stock futures open

interest has increased from  ` 53,000/- cr. to  ` 56,977/- cr.

Large cap names which added significant positions last

week are HEROMOTOCO, COALINDIA, INDUSINDBK,

M&M and AMBUJACEM. On the other hand unwinding was

visible in counters like TATAPOWER, INFRATEL,

TATAMTRDVR, MARUTI and BHEL.

Nifty current month futures closed at a premium of 17.40

points against a premium of 22.90 points to its spot. Next

month future is trading with premium of 52.10 points.

Liquid counters where CoC is high are HDFCBANK,

INDUSINDBK, BPCL, BANKBARODA and ZEEL. Stocks with

negative CoC are HAVELLS, BATAINDIA, CANBK, GAIL

and HINDALCO.

Derivative Strategy  

Scrip: NIFTY CMP : 7850.45 Lot Size : 75 Exercise Date (F & O) :

28th Apr 2016

Expected Payoff

Closing Price

(

`

)

Expected

Profit/Loss 

7750 (` 35.00)

7850 (` 35.00)

7950  (` 35.00)

8050   ` 15.00

8150   ` 115.00

8250   `215.00

View :Bullish Strategy: Long Call.

Buy/Sell  Qty  Scrip  StrikePrice 

Series  OptionType 

Buy/Sell Rate

(

`

) 

BUY 75 NIFTY 8000 APR CE 35.00

BEP – 8 5 

Max. Risk: ` 2,625/- Max. Profit:  Unlimited If NIFTY closes on or below strike price on expiry. If NIFTY continues to move above BEP on expiry.

NOTE: Profit can be booked before expiry if NIFTY moves in favourable direction.

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 Research Team Tel: 022 - 39357800 E-mail: research@angelbroking.com Website: www.angelbroking.com

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