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Technical and Derivatives Review | October 14, 2021

Relentless rally continues, 18000 conquered with an ease

Sensex (61306) / Nifty (18339)

Source: Tradingview.com

Future outlook

Markets had a soft opening to the week on Monday taking into consideration some nervousness in global bourses. However the

things settled thereafter as we witnessed a strong close above 17900 for the first time ever. This was followed by back to back

excellent sessions for our market and in the process; the Nifty not only reached yet another milestone of 18000 but even surpassed

it comfortably to mark new highs beyond 18300. After two weeks’ of slight pause, Nifty finally resumed its upward trajectory to add

more than a couple of percent to the mighty bulls’ kitty.

Despite being a truncated week, the bulls made their presence feel in all four trading sessions. Importantly, the banking space

provided a helping hand first when it was the most needed because the IT basket had a shaky start after weak set of numbers from

TCS over the last weekend. In fact, as the week progressed, the buying momentum accelerated in the banking counters which led

the benchmark at such record highs. This rally has been relentless in nature and we must admit that it has overshot our expectations

by a fair margin. But this is how market functions, it is always full of surprises and it moves the way it wants to. Now since we are

trading in an uncharted territory, it would be very difficult to project higher levels. Hence, 18500 is to be seen as immediate

psychological level and thereafter every 100 points round figure is to be considered as next level.

As far as supports are concerned, 18200 followed by 18000 are to be seen as strong supports for the coming days. Here, 18000 holds

a key for the bulls and as long as it’s defended comfortably, the bulls have no reason to worry for. Although the trend has been

extremely strong, we reiterate that one should avoid getting complacent at such elevated levels. The pragmatic approach would be

to go one step at a time and try to avoid aggressive bets overnight. The stock specific action continues and hence, traders are

advised to keep focusing on such bets.

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Technical and Derivatives Review | October 14, 2021

Stronger hands turn buyers in derivatives segment

Nifty spot closed at 18338.55 this week, against a close of 17895.20 last week. The Put-Call Ratio has increased from 1.30 to 1.44.

The annualized Cost of Carry is positive at 2.34%. The Open Interest of Nifty Futures increased by 0.34%.

Derivatives View

Nifty current month future closed with a premium of 18.20 points against a premium of 17.80 points to its spot. Next month future

is trading at a premium of 47.95 points.

Nifty rallied sharply during the week to end the truncated week well above 18300. However, we did not see any relevant open

interest addition in Nifty during the week. The Banking index rallied sharply on the weekly expiry day where we witnessed some

short covering. FII’s seemed a bit skeptical at the start of the week, but then they too participated and formed long positions in

derivatives segment. They bought index futures due to which their ‘Long Short Ratio’ has increased to 67 percent. In options

segment, the call writers at 18000 strike ran to cover their positions as the market surpassed that level. Then, as the index continued

its momentum, aggressive put writing was seen which shifted the support base higher. The open interest data now indicates good

support around 18200 and then at 18000. On the flipside, 18500 would be the immediate resistance on the upside. Traders are

advised to continue to look for stock specific opportunities and trade with the momentum.

Weekly change in OI

Short Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

TCS 14871900 77.24 3627.25 (7.57)

HCLTECH 23800000 21.36 1249.50 (5.50)

HDFCLIFE 22664400 18.63 696.85 (3.86)

BIOCON 19842100 12.76 348.80 (3.00)

METROPOLIS 736600 12.70 2649.50 (3.02)

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

RECLTD 36078000 46.27 165.45 4.81

PFC 38898800 44.80 149.65 6.89

ZEEL 66999000 30.57 320.80 8.18

IEX 11295000 28.28 796.60 13.84

NTPC 69847800 25.75 149.15 5.37

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Technical and Derivatives Review | October 14, 2021

Research Team Tel: 022 - 39357600 (Extn – 6844) Website: www.angelone.in

For Technical Queries E-mail: technicalresearch-cso@angelbroking.com

For Derivative Queries E-mail: derivatives.desk@angelbroking.com

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Technical and Derivatives Team:

Sameet Chavan Chief Analyst – Technical & Derivatives sameet.chavan@angelone.in

Ruchit Jain Senior Analyst - Technical & Derivatives ruchit.jain@angelone.in

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelone.in

Sneha Seth Derivatives Analyst sneha.seth@angelone.in