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Technical and Derivatives Review |March 10, 2023
Weak global cues turned culprit to spoil market sentiments
Sensex (59135) / Nifty (17413)
Source: Tradingview.com
Future outlook
Following the strong closing of the previous week, we had a spectacular start to the week with a gap-up opening. The positive
momentum continued to retest 17800; however, ahead of the mid-week holiday, some profit booking was seen at higher levels. In
the following trading session, despite a bleak opening, the bulls remained in commanding positions. After repeatedly failing to cross
17800, we witnessed a sharp sell-off during the last two sessions to retest sub-17350 levels. Eventually after some respite, Nifty
ended a tad above 17400 with a weekly loss of a percent.
During the week, the sell-off was triggered as Nifty failed to cross a key technical level of 17800, which is the 61.8% retracement of
the recent down move. However, considering the recent positive development and head start to the week, we were of the view that
Nifty would surpass the hurdle to reclaim 18000. Now, with two back-to-back weak sessions, the momentum is again in favour of
bears. Despite this, we remain a bit hopeful and expect important levels to remain unbroken in coming week; especially after seeing
prices showing resilience around the 200-SMA and forming a key technical pattern known as ‘Bullish Hammer’. It would however be
very early to jump to any conclusion and considering the recent volatility, traders should ideally wait for the trend to establish. In
such a scenario, Friday’s low around 17320 would be seen as immediate support followed by sacrosanct support at February's swing
low of 17250. On the flip side, the bearish gap left around 17570 17600 should be considered as immediate hurdles. In our sense,
instead of swaying on both sides of the trend, traders should ideally prefer staying light on positions and keep accumulating quality
propositions in a staggered manner.
The weak global cues and underperforming heavyweights (especially Reliance) were the major culprits in dragging our markets
down. Going ahead, it would be crucial to keep a close tab on them as any positive development globally, can elevate the overall
sentiments. Also, Nifty Midcap 100 outperformed as this index ended the week in green, forming a hammer’ pattern around the
recent trend line breakout levels. If the markets find some relief, we may see many midcap counters giving mesmerizing move.
Traders are advised to focus on such counters that are likely to provide better trading opportunities.
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rt Form
F&O data indicates market to be in an oversold region
Nifty spot closed at 17412.90 this week, against a close of 17594.35 last week. The Put-Call Ratio has decreased from 1.17 to 0.89 on
Weekly basis. The annualized Cost of Carry is positive at 4.37%. The Open Interest of Nifty Futures increased by 8.94%.
Derivatives View
Nifty current month’s future closed with a premium of 39.65 against a premium of 77.20 points to its spot in the previous week.
Next month’s future is trading at a premium of 147.15 points.
It was a roller coaster ride for our market, as we kickstarted the week on a promising note. But the last two sessions not only pared
down the initial gains but dented the overall sentiments, with Nifty shedding over a percent on a weekly basis. In the F&O space, we
witnessed short addition in both key indices on a WoW basis. While on the options front, a decent piling of OI is seen at the 17400
put strike, followed by 17300 PE, indicating nearby support for Nifty. On the flip side, the 17500-call strike has the highest OI
concentration, implying an immediate hurdle. Meanwhile, the stronger hands have added shorts in the system, leading the Long
Short Ratio’ to plunge to 16% from 23% WoW. Considering the mentioned data, the market seems a bit oversold, and any short
covering shall be an encouraging sign.
Chg (%)
RBLBANK 30585000 15.59 155.15 (7.48)
POLYCAB 1248900 13.06 2907.55 (5.12)
CROMPTON 6286500 12.75 298.10 (4.84)
BAJFINANCE 5421125 11.40 5887.20 (3.86)
LALPATHLAB 942500 9.82 1832.20 (6.33)
Weekly change in OI
Long Formation
Chg (%)
BALRAMCHIN 8147200 40.59 400.20 8.82
MGL 2849600 36.74 991.35 8.76
RECLTD 55768000 23.27 123.00 3.40
PFC 61386200 17.24 167.50 7.20
NTPC 92659200 16.01 181.10 4.20
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Technical and Derivatives Review |March 10, 2023
Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelone.in
Sneha Seth Senior Analyst – Technical & Derivatives sn[email protected]elone.in
Rajesh Bhosale Technical Analyst rajesh.bh[email protected]elone.in
Osho Krishan Senior Analyst – Technical & Derivatives osho[email protected]gelone.in
Research Team Tel: 022 - 39357600 Website: www.angelone.in
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