Technical Picks | March 26, 2016

Don’t short but keep booking longs around 7750 - 7780

Sensex (25338) / Nifty (7717)

Trading for the truncated week began on a cheerful note

Exhibit 1: Nifty Weekly chart

owing to positive mood across the globe. Subsequently, the

Nifty managed to extend its early morning gains to end the

Monday’s session tad above the 7700 mark. However, the

remaining couple of sessions of the week traded with no

clear direction to conclude the penultimate week of the

March month to post highest weekly close of the calendar

year 2016 until now. On the sectoral front, this week’s rally

was mainly led by the Metal, Realty and Banking

conglomerates. The Nifty ended the week with a decent gain

of 1.47% over the previous week’s closing.

Pattern formation:

 The ’89-day EMA’ and the ’89-week EMA’ for the

Source: Company, Angel Research

Sensex/Nifty are placed at

24893

7558 and

25611 / 7746 levels, respectively.

Exhibit 2: Nifty Daily chart

 The ’20-day EMA’ and the ‘20-week EMA’ for the

Sensex/Nifty are placed at

24552

7488 and

24967 / 7586 levels, respectively.

Future outlook

A late surge on previous Friday to conquer the 7600 mark

set the stage for an ideal gap up opening on Monday.

Market did not surprise us also as we saw Monday's opening

with an upside gap supported by favorable global cues. In

fact, the bulls managed to take the momentum forward to

post decent gains to end the truncated week on a high note.

The Nifty has now reached yet another landmark of 7700

within no time. As of now, we do not see any weakness on

Source: Company, Angel Research

charts and thus, we reiterate our view that traders shouldn't

pre-empt any reversal until we see any definite signal.

On the downside, 7600 - 7550 would now be seen as a

However, having said that, one can adopt a cautious

strong support. Meanwhile, individual stocks are giving good

approach if Nifty reaches 7750 - 7780 (strong resistance of

moves and thus, traders should focus on such potential

the Weekly ’89 EMA’) levels by booking timely profits or

trades.

trailing stop losses; but, shorting is strictly avoided in such

kind of strong optimism.

For Private Circulation Only

Technical Picks | March 26, 2016

Weekly Pivot Levels For Nifty 50 Stocks

SCRIPS

PIVOT

SENSEX

24,843

25,090

25,236

25,483

25,629

NIFTY

7,577

7,647

7,687

7,757

7,798

NIFTY BANK

15,631

15,760

15,864

15,992

16,096

ACC

1,308

1,340

1,370

1,402

1,432

ADANIPORTS

231

235

239

243

248

AMBUJACEM

215

222

228

234

240

ASIANPAINT

828

839

857

868

886

AXISBANK

427

432

440

445

453

BAJAJ-AUTO

2,262

2,309

2,337

2,384

2,411

BANKBARODA

140

142

145

147

150

BHEL

108

112

115

119

122

BPCL

845

857

872

884

900

BHARTIARTL

336

347

354

365

372

BOSCH

18,022

19,120

19,832

20,929

21,641

CAIRN

151

155

157

161

163

CIPLA

519

526

532

539

546

COALINDIA

291

294

297

301

303

DRREDDY

2,924

2,986

3,093

3,155

3,262

GAIL

346

351

360

365

374

GRASIM

3,562

3,672

3,749

3,859

3,936

HCLTECH

803

810

821

828

838

HDFC

1,022

1,036

1,046

1,060

1,070

HDFCBANK

1,109

1,136

1,155

1,182

1,201

HEROMOTOCO

2,684

2,778

2,846

2,940

3,009

HINDALCO

HINDUNILVR

832

853

868

889

904

ICICIBANK

228

231

233

236

238

IDEA

102

104

107

109

INDUSINDBK

915

922

929

936

944

INFY

1,158

1,183

1,197

1,222

1,236

ITC

311

318

327

334

343

KOTAKBANK

640

650

663

673

686

1,174

1,208

1,229

1,263

1,283

LUPIN

1,462

1,493

1,532

1,564

1,603

M&M

1,194

1,222

1,244

1,271

1,293

MARUTI

3,556

3,646

3,695

3,785

3,834

NTPC

125

126

127

129

130

ONGC

208

211

215

219

222

POWERGRID

135

136

138

139

141

PNB

RELIANCE

1,005

1,017

1,035

1,047

1,064

SBIN

191

194

196

199

201

SUNPHARMA

803

825

838

860

874

TCS

2,393

2,433

2,461

2,501

2,528

TATAMOTORS

359

368

375

384

391

TATAPOWER

TATASTEEL

295

306

312

323

329

TECHM

461

470

484

494

508

ULTRACEMCO

3,038

3,118

3,192

3,272

3,345

VEDL

102

WIPRO

533

544

553

565

574

YESBANK

799

824

838

863

877

ZEEL

380

384

390

394

400

Technical Research Team

For Private Circulation Only

Derivatives Review | March 26, 2016

Longs are still intact, avoid shorting.

Nifty spot closed at 7716.50 this week, against a close of 7604.35 last week. The Put-Call Ratio has increased from 0.99 to 1.04

levels and the annualized Cost of Carry is positive at 11.71%. The Open Interest of Nifty Futures increased by 2.48%.

Put-Call Ratio Analysis

Implied Volatility Analysis

PCR-OI has increased from 0.99 to 1.04 levels mainly due

Implied Volatility (IV) for NIFTY has slightly increased from

to huge OI addition in put options. 7600-7700 strikes of

12.25% to 12.93%. Historical volatility (HV) of NIFTY is at

put options added good amount of OI, we believe it’s more

21.37% and that for BANKNIFTY is at 29.01%. Liquid

of writing which took place, expecting Nifty to close above

counters having very high HV are L&TFH, TVSMOTOR,

7700 mark on expiry. In call options, 7800 strike added

BEL, UBL and TATAPOWER. Stocks where HV are on lower

decent build-up. Unwinding was visible in 7500 & 7600

side are JISLJALEQS, KPIT, RCOM, ZEEL and

call and 7300 & 7400 put options. Maximum build-up in

APOLLOHOSP.

current series is seen in 7800 call and 7600 put options.

Open Interest Analysis

Cost-of-Carry Analysis

Total open interest of market has increased from

Nifty current month futures closed at a premium of 19.80

`2,23,644/- cr. to `2,42,522/- cr. Stock futures open

points against a premium of 0.95 points to its spot. Next

interest has decreased from `55,606/- cr. to `55,972/- cr.

month future is trading with premium of 64.05 points.

Large cap names which added significant positions last

Liquid counters where CoC is high are UNITECH,

week are DRREDDY, GRASIM, LUPIN, INFY and

JISLJALEQS, KTKBANK, JPASSOCIAT and SOUTHBANK.

HINDUNILVR. On the other hand unwinding was visible in

Stocks with negative CoC are PAGEIND, DLF, NMDC,

counters like TECHM, AXISBANK, BPCL, ONGC and

PCJEWELLER and JUSTDIAL.

NMDC.

Derivative Strategy

Scrip: NIFTY

CMP : 7716.50

Lot Size : 75

Exercise Date (F & O) :

31st Mar 2016

View: Mildly Bullish

Strategy: Ratio Bull Call Spread.

Expected Payoff

Buy/Sell

Qty

Scrip

Strike

Series

Option

Buy/Sell Rate

Closing Price

Expected

Price

Type

(`)

Profit/Loss

BUY

NIFTY

7700

MAR

55.00

7580

(`25.00)

SELL

150

NIFTY

7800

MAR

15.00

7650

(`25.00)

LBEP - 7725

7720

(`5.00)

UBEP - 7875

7790

`65.00

Max. Risk: Unlimited

Max. Profit: `5,625/-

If NIFTY continues to move above UBEP on expiry

If NIFTY closes at 7800 levels on expiry.

7860

`15.00

NOTE: Profit can be booked before expiry if NIFTY moves in favourable direction and time value decays.

7930

(`55.00)

For Private Circulation Only

Research Team Tel: 022 - 39357800

E-mail: [email protected]

Website: www.angelbroking.com

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