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Technical and Derivatives Review | May 20, 2022

All’s well that ends well, Nifty back above 16200

Sensex (54326) / Nifty (16266)

Source: Tradingview.com

Future outlook

We started the proceedings on Monday on a positive note despite sluggish global cues. In the initial hour, the gains extended to

move towards the 16000 mark. Similar to recent trend, the profit booking took place at higher levels to erase all gains around the

midsession. Although market recovered slightly thereafter, the overall movement was quite choppy to conclude the day around

15850 with nearly four tenths of a percent gains. This was followed by a massive relief move on Tuesday, which extended towards

16400 on the subsequent day. However, the global weakness struck back once again on weekly expiry session with huge gap down

to retest 15800. Market was not done with its twists as Friday’s session opened with yet another gap; but this time it was fortunately

on the higher side. This pleasant surprise picked up its momentum as the day progressed, to conclude the week convincingly above

the 16200 mark.

The second half of the week gone by was full of dramatic twists and turns. Both counterparties were caught napping in all this but

as we mostly say ‘All’s well that ends well’. Eventually the bulls turned out to be victorious as they managed to pull the Nifty back

inside the safe terrain by gaining over 3% from previous weekly close. With reference to our previous week’s commentary, 15700 –

15600 stands to be a very solid support; because it coincides with the ’89-EMA’ on weekly chart who has proved its mettle many

times over the past many years. Yes, we are not completely out of the woods but at least we are well above the crucial support

zone. On the flipside, the cluster of resistance is placed around 16400 – 16500 – 16600 and till the time we do not surpass it

convincingly, one should avoid being complacent. At this juncture, we are clearly mirroring US markets’ sentiments and hence, if

market has to move higher, the global relief is the key.

Let’s see how things pan out next week. It would be important to keep a regular tab on global developments and one should

certainly be prepared for surprising moves on either side. As far as sectoral participation is concerned, we witnessed some decent

relief moves in most of the beaten heavyweight spaces this week. Also, the broader market has started to show some encouraging

signs, which we believe should do extremely well if market remains above the psychological support of 16000.

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Technical and Derivatives Review | May 20, 2022

The roller coaster week ended with an encouraging F&O data

Nifty spot closed at 16,266.15 this week, against a close of 15782.15 last week. The Put-Call Ratio has increased from 0.73 to 1.07.

The annualized Cost of Carry is negative at 4.82%. The Open Interest of Nifty Futures decreased by 4.00%.

Derivatives View

Nifty current month’s future closed with a discount of 12.90 points against a premium of 4.45 points to its spot. Next month’s future

is trading at a discount of 16.30 points.

It has been a roller coaster ride for the equity market as we tested the previous week’s lows as well as the highs and fortunately

recouped all the losses of the last weekly candle. Even the phenomenon of selling spree came to a halt with the positive weekly

closure. However, the rally was mainly due to short covering as the stronger hand continued to curb liquidity from the equity market

but preferred covering their shorts in the index futures segment on Friday. On the options front, a pile-up is seen at 16000 put strike,

indicating strong near-term support. While on the higher end, 16300-16500 call strikes have seen some fresh addition. Meanwhile,

the long-short ratio of FII has seen an increase from 23% to 39% on a weekly basis, that have bolstered the bullish sentiments. The

data signifies an encouraging sign, though it is advisable to avoid being complacent and stay watchful with daily developments in

both domestic and global markets.

Scrip

Futures

Chg (%)

Price

Chg(%)

HONAUT 16665 62.43 31512.85 (7.37)

LALPATHLAB 1383625 60.63 1956.25 (12.45)

METROPOLIS 601700 59.77 1748.80 (11.28)

HINDPETRO 16100100 38.51 244.55 (5.21)

HDFCAMC 5437100 36.53 1710.55 (3.32)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

ABFRL 14060800 27.91 271.05 2.69

COROMANDEL 1471700 27.35 931.60 5.59

TVSMOTOR 8922200 21.90 686.70 8.36

CHOLAFIN 10117500 20.99 645.60 2.36

EICHERMOT 3886050 20.68 2704.05 10.96

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Technical and Derivatives Review | May 20, 2022

Sameet Chavan

Chief Analyst

–

Technical & Derivatives

sameet.chavan@angelone.in

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

Rajesh Bhosale Technical Analyst rajesh.bhosle@angelone.in

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

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

For Technical Queries E-mail: technicalresearch-cso@angelone.in

For Derivative Queries E-mail: derivatives.desk@angelone.in

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