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Nifty placed at crucial resistance; undertone remains bullish
Sensex (59463) / Nifty (17698)
Source: Tradingview.com
Future outlook
Our market started the truncated week on a flat note taking cues from the muted global markets, but soon after, the momentum
accelerated led by a rally in the heavyweights, and the Nifty reclaimed the 17500 mark. As the week progressed, our markets also
extended their rally, which was generally due to the improvement in the global markets and the positive contribution of the FIIs.
However, the follow-up buying interest was missing for the entire week, showcasing the tentativeness among the market
participants at the higher levels. Eventually, the benchmark index continued its winning streak for the fourth consecutive week and
ended the session a tad below 17700 by procuring over 1.73 percent to the previous week’s close.
Technically speaking, the winning streak in the index has brought it towards the sloping trendline on the weekly chart, which might
be considered as the major hurdle for the index in the near period. Also, the recent upward move has been vertical in nature, so one
should not rule out the possibility of profit booking at the critical resistance zone. And any sort of correction in the upcoming week
should be considered healthy post such a strong rally, as structurally, we may get a higher bottom. The undertone is likely to remain
strongly bullish, and any dip towards the consolidation zone of 17150-17400 could be seen as an opportunity to add new longs in
the index from a directional point of view. As far as levels are concerned, 17780-17800 is the crucial supply zone, and any decisive
breach above the same could only trigger the next set of rallies in the index.
Considering the recent price action, traders are advised not to carry aggressive overnight bets for a while and should adapt the
strategy to follow one step at a time and respect levels on either side. The favorable global scenario was one of the major catalysts
for the entire bull run in the week; hence, one should stay abreast with global developments and the key domestic macro data. Also,
one can continue to focus on individual stocks as the thematic moves are still playing out well in the market.
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17800-18000 to be seen as strong resistance
Nifty spot closed at 17698.15 this week, against a close of 17397.50 last week. The Put-Call Ratio has increased from 1.05 to 1.24.
The annualized Cost of Carry is positive at 8.59%. The Open Interest of Nifty Futures increased by 9.67%.
Derivatives View
Nifty current month’s future closed with a premium of 14.90 against a premium of 18.65 points to its spot in the previous week.
Next month’s future is trading at a premium of 84.00 points.
Nifty extended the northward move for the fourth consecutive week to reclaim 17700 with an authority. In F&O space, addition of
fresh longs was visible in both the key indices during the week; especially banking index which added 27% of fresh contracts. FIIs
continue their buying streak as they added shares of worth Rs. 7850 crores this week. In index futures they added some mixed bets,
as a resulted Long Short Ratio’ remains unchanged at 55% WoW. Call writers added fresh positions in 17800-18000 strikes suggest
strong hurdle around these strikes; whereas 17500 put strikes holds maximum positions which could act as immediate support zone.
After a strong run-up, any kind of profit booking at higher levels can’t be ruled out. Hence, traders are advised not to carry
aggressive overnight bets for the time being and keep focusing on individual space.
Chg (%)
IPCALAB 1747850 110.74 919.20 (9.30)
DIVISLAB 3272550 28.90 3734.00 (4.05)
MFSL 1966900 23.71 796.70 (3.26)
MRF 87520 23.58 83161.65 (6.43)
INDUSTOWER 22643600 15.36 196.90 (1.67)
Weekly change in OI
Long Formation
Chg (%)
TATACHEM 9463000 91.02 1123.40 17.81
INDIACEM 15184400 50.20 193.50 1.28
PFC 41788000 41.09 121.15 1.51
GSPL 4090000 24.60 247.90 5.13
IRCTC 16373875 23.84 657.25 2.68
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Sameet Chavan
Chief Analyst
Technical & Derivatives
sameet.cha[email protected]ngelone.in
Sneha Seth Senior Analyst – Technical & Derivatives sne[email protected]gelone.in
Rajesh Bhosale Technical Analyst rajesh.bhosle@angelone.in
Osho Krishan Senior Analyst – Technical & Derivatives osho.kri[email protected]gelone.in
Research Team Tel: 022 - 39357600 (Extn – 6844) Website: www.angelone.in
For Technical Queries E-mail: technicalresearch-c[email protected].in
For Derivative Queries E-mail: derivatives[email protected]gelone.in
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