Technical and Derivatives Weekly Review - September 30, 2022

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Tech

nical and Derivative

Review

|September 30, 2022

All’s well that ends well, Nifty reclaims 17000

Sensex (57427) / Nifty (17094)

Source: Tradingview.com

Future outlook

Over the weekend, global markets felt a tremor after US Dollar Index surpassing alarming levels which obviously has a negative

correlation with equity markets. We started the week with a decent downside gap on Monday amid global weakness. As the day

progressed, the selling augmented across the broader market to test the psychological level of 17000. On the following session,

markets had a positive start which eventually got sold into. In fact, around the mid-week, the Nifty finally sneaked below 17000 to

even enter sub-16800 territory. On Friday, market had a litmus test ahead of the RBI Monetary policy as the Nifty was placed slightly

below key support of 16800. Market participants were hoping for some aid from this event and RBI Governor did not disappoint this

time as we not only witnessed a V-shaped recovery post the policy; but also went on to reclaim 17000 with some authority.

With Friday’s smart rally, Nifty almost engulfed entire week’s traded down move and hence, restricted the weekly losses tad above a

percent. Markets were extremely oversold, but they were reluctant to rebound as global weakness persisted throughout the week.

Post the RBI Monetary policy, we have managed to reverse precisely from a key support zone and if global markets support, we may

see this relief getting extended in the coming week as well. Technically speaking, the daily time frame exhibits a ‘Bullish Engulfing’

pattern and on weekly chart, ‘Dragonfly Doji’ is clearly visible. Importantly, Nifty managed to defend the ‘20-EMA’ (on a closing

basis) on weekly chart, which is an indication of some strength. Going forward, a move beyond 17200 on a closing basis would

strengthen the recovery rally. In this case, 17350 – 17500 levels cannot be ruled out. On the flipside, 16900 – 16750 has now

become a sacrosanct support zone for the bulls. We advise traders to keep a close tab on global developments and any favorable

cues on this front would certainly provide the much-needed push for our domestic markets. Till the time important levels are not

reclaimed, it’s better to stay positive but adopt one step at a time approach. Also, in case of an extended rebound, one can keep

focusing on recent beaten down heavyweight spaces like, Financials and Auto, that are likely to give a sustainable relief.

For Private Circulation Only

Tech

nical and Derivative

Review

|September 30, 2022

Volatility to persist, Long Short Ratio plunged to 13%

Nifty spot closed at 17094.35 this week, against a close of 17327.35 last week. The Put-Call Ratio has increased from 0.76 to 1.22

The annualized Cost of Carry is positive at 0.70%. The Open Interest of Nifty Futures decreased by 7.63%

Derivatives View

Nifty current month’s future closed with a premium of 8.85 against a premium of 8.50 points to its spot in the previous week. Next

month’s future is trading at a premium of 57.35 points.

The Indian equity market has seen a roller coaster week once again, wherein the benchmark index started with a decent gap down

and witnessed a sell-off throughout the week until the last trading session that almost engulfed the entire week’s traded-down

move. There have been mixed positions in the F&O space throughout the week, but on a net basis, shorts were added. Even the

rollover in Nifty and BankNifty stood at 78% and 82%, respectively, which is slightly lower compared to the previous series. On the

options front, piling up of positions is visible in the 16800-16700 put strikes, indicating it to be a strong demand zone. While on the

higher end, 17200-17400 call strikes have seen piling up of positions, which hints at a broad range movement in the near period. The

stronger hands have curbed their positions resulting in a plunging of the ‘Long Short Ratio’, to 13% from 20% WoW. Going ahead, it

is advisable to keep a close tab on global developments and be very selective for the next couple of trading sessions.

Scrip

Futures

Chg (%)

Price

Chg(%)

AXISBANK 47037600 21.02 735.45 (4.52)

BERGEPAINT 7477800 10.23 620.25 (2.37)

HDFC 17947800 9.90 2299.60 (2.35)

MCDOWELL-N 19779375 7.95 847.20 (2.74)

CANFINHOME 6427200 7.73 482.80 (6.61)

Weekly change in OI

Long Fo

rmation

Scrip

Futures

Chg (%)

Price

Chg(%)

INDIACEM 15103200 23.91 271.85 7.05

DABUR 11046250 14.77 574.55 1.02

GODREJCP 6091000 9.53 914.90 2.77

TORNTPHARM 1657000 4.51 1565.65 3.08

SUNPHARMA 23284100 1.35 951.10 3.34

For Private Circulation Only

Tech

nical and Derivative

Review

|September 30, 2022

Sameet Chavan

hief Analyst

–

Technical

& Derivati

ves

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 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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Tech

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|September 30, 2022

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