Technical and Derivatives Weekly Review - October 23, 2023

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Technical and Derivatives Review |October 23, 2023

Global overhang keeps market in check; Midcap index in jeopardy

Sensex (65398) / Nifty (19543)

Source: Tradingview.com

Future Outlook

The Indian equity market started the week on a cautious note, wherein the benchmark index initially showed some resilience to the

global uncertainties and tried making a move on the higher front. But by the latter half of the week, it succumbed to the global

pressure and slipped towards the pivotal support zone. Eventually, Nifty took a breather after two consecutive weeks of recovery

and managed to withhold the crucial zone 19500, with a cut of over a percent in the week.

Technically, the Nifty50 index was restrained from the bearish gap on the daily chart and reverted towards the pivotal level amidst

the unfavourable global scenario. Fortunately, there has not been a significant plunge in our indices, rather just a retraction into the

consolidation zone. The market conditions remain tentative till global uncertainty prevails and the same could be seen on the

technical charts. As far as levels are concerned, the bullish gap of 19490-19450 withholds immediate support, followed by 19400,

while any breakdown could disrupt the ongoing view, and the recent swing low of 19333 would become very much in the vicinity.

On the higher end, 19700-19750 is expected to act as an immediate hurdle, followed by the formidable resistance of 19850-19880

(Bearish Gap) and an authoritative breakthrough could only re-strengthen the lost momentum to the bulls of D-Street.

Going ahead, we would likely remain cautious amidst the ongoing geopolitical scenario, which may be deceptive and could trap the

traders on either side. Hence, one needs to follow the aforementioned levels thoroughly and in the meantime, stay abreast with the

geopolitical developments. Also, it is advisable to avoid aggressive overnight bets as an intense bout of profit booking/correction is

evident in the Midcap space as indicated by the negative crossover of the 'RSI-Smoothened in weekly time frame chart. This

condition is very rare as the negative development in this oscillator is visible in the extreme overbought territory, coupled with a

breakdown in prices during Friday's session.

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Technical and Derivatives Review |October 23, 2023

Sho

Form

ion

Stronger hands added bearish bets

Nifty spot closed at 19542.65 this week, against a close of 19751.05 last week. The Put-Call Ratio has decreased from 1.14 to 0.90 on

a weekly basis. The annualized Cost of Carry is at -1.28%. The Open Interest of Nifty Futures decreased by 4.49%.

Derivatives View

Nifty current month’s future closed with a discount of 14.80 against a discount of 9.00 points to its spot in the previous week. Next

month’s future is trading at a premium of 111.50 points.

The market witnessed a volatile week, initially index rebounded towards 19850 mark. However, we witnessed smart selling on

Wednesday and follow-up selling was extended till the last day to test 19550. Eventually, with no sign of recovery, the index

concluded the week tad above 19500. On the derivatives front, we observed decent unwinding in key indices on a WoW basis. FIIs

remained net sellers in equities on net basis and added bearish bets in index futures segments. Hence their LSR decreased slightly to

26% from 27% seen during the start of the week. For the coming monthly series, call writers reminded activity in 19600-19700

strikes, while no relevant activity was observed on the put side. Highest open interest concentration is now visible in 19600 call and

19500 put strikes. For now, we would advocate avoiding any aggressive directional bets in index and trade in individual space but

being selective.

Scrip

Futures

Chg (%)

Price

Chg(%)

HDFCLIFE 18423900 21.47 625.60 (2.17)

BALRAMCHIN 12412800 15.76 417.25 (1.53)

JKCEMENT 778500 13.61 3250.65 (1.67)

LTIM 1919400 13.38 5099.75 (6.04)

INDIACEM 24423800 13.11 223.45 (1.37)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

DELTACORP 15545600 23.38 140.35 7.47

BHEL 118566000 11.25 128.40 2.64

COROMANDEL 1467200 9.22 1154.55 1.21

HINDUNILVR 9578100 9.12 2569.95 3.22

GRANULES 10134000 9.11 354.25 2.65

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Technical and Derivatives Review |October 23, 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

Research Team Tel: 022 - 39357600 Website: www.angelone.in

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

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Technical and Derivatives Review |October 23, 2023

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