Technical and Derivatives Weekly Review - October 16, 2023

For Private Circulation Only

Technical and Derivatives Review |October 16, 2023

Amidst an action-packed week, Nifty ends a tad above 19750

Sensex (66283) / Nifty (19751)

Source: Tradingview.com

Future Outlook

The week commenced with a gap-down opening due to mounting geopolitical concerns with respect to the Israel - Palestine war.

The overall situation is very dismal there; but fortunately, in the market, we did not see further escalation. As the week progressed,

the benchmark index gradually ascended in the following sessions. In anticipation of key quarterly results of a few heavyweight IT

counters, the tentativeness was clearly visible at higher levels. On Friday, we started the session with a decent cut; courtesy to weak

guidance from Infosys. Nevertheless, traders swiftly bought this dip and recovered major lost ground. Eventually, the eventful week

concluded with a gain of half a percent, ending a tad above the 19750 mark.

Throughout the week, there was a tug-of-war between bulls and bears, ultimately leaving prices in an uncertain position. Several

positive developments, such as prices closing above key moving averages and a favorable RSI smoothened buy signal, were noted.

However, these indicators are sometimes laggard (late to interpret), and the true situation is identified by the momentum that

seemed to be missing by the bulls. Additionally, prices seemed tentative as they approached a critical level of 61.8% retracement,

coinciding with a key bearish gap. It is essential for the bulls to convincingly surpass this crucial level around 19880, or else there

might be the formation of a lower top on the daily chart, potentially leading to near-term weakness. On the flip side, while there was

a willingness to buy on dips during the week, caution is advised due to ongoing geopolitical concerns, and aggressive long bets

should be avoided overnight. The next market direction will depend on global developments and the quarterly earnings

announcements of key heavyweight companies. Traders should keep an eye on specific levels to assess the trend. Key support levels

for the week are 19600 and 19480, while formidable barriers are set at 19880 and 20000.

Throughout the week, there were opportunities for stock-specific trades, and in the future, trading opportunities may emerge on

both sides of the trend across various sectors as the earnings season begins. Traders can focus on these opportunities for potential

outperformance, but they should exercise caution and be highly selective.

For Private Circulation Only

Technical and Derivatives Review |October 16, 2023

Sho

Form

ion

No meaningful change in F&O data, stay light

Nifty spot closed at 19751.05 this week, against a close of 19638.30 last week. The Put-Call Ratio has increased from 1.12 to 1.14 on

a weekly basis. The annualized Cost of Carry is at 1.28%. The Open Interest of Nifty Futures decreased by 6.15%.

Derivatives View

Nifty current month’s future closed with a discount of 9.00 against a premium of 25.00 points to its spot in the previous week. Next

month’s future is trading at a premium of 115.35 points.

The Indian equity market witnessed a volatile week. The week was inaugurated on a rough note testing 19500 on the first day of the

week; however, smart recovery was seen from the next day onwards to head towards 19850 mark. Friday we once again witnessed

a gap-down opening which got bought into to end the week around 19750 mark. On the derivatives front, open interest shed for the

key indices. FIIs continued to remain net sellers in equities during the week and their activity in the index futures segment remained

muted. Their Long-short ratio remained unchanged at 27% on a weekly basis. For the coming festive weekly series, 19700 put and

19800 call strikes are attracting trader’s attention. At this point in time, it’s advisable to avoid any aggressive bets until the global

uncertainty subsides.

Scrip

Futures

Chg (%)

Price

Chg(%)

ICICIPRULI 10300500 50.76 523.70 (6.81)

DEEPAKNTR 2822100 26.81 2084.15 (1.47)

INFY 28519200 23.63 1414.60 (3.72)

INDIACEM 24423800 22.54 223.45 (3.83)

INDIAMART 715200 19.20 2832.05 (1.69)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

CHAMBLFERT 16317200 34.40 292.20 6.02

UBL 2981600 31.16 1587.20 1.20

INDIGO 5887200 29.45 2618.20 2.79

IPCALAB 2089750 23.80 955.10 2.10

MARUTI 3092400 18.76 10728.80 3.98

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Technical and Derivatives Review |October 16, 2023

Sameet Chavan Head Research – Technical & Derivatives sameet.chavan@angelone.in

Sneha Seth Senior Analyst – Technical & Derivatives sneha.seth@angelone.in

Rajesh Bhosale Analyst – Technical rajesh.bhosle@angelone.in

Osho Krishan Senior Analyst – Technical & Derivatives osho.krishan@angelone.in

Hitesh Rathi Analyst – Technical & Derivatives hitesh.rathi@angelone.in

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