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The tug of war continues…
Sensex (17193) / Nifty (5169)
This week markets opened on a flat note and then made an
attempt to cross immediate resistance of 17702 / 5326.
However, due to immense selling pressure at these levels,
markets pared gains and a minor recovery during the latter
part of Friday's session pushed indices to close marginally above
the support level of 17165 / 5160. On the sectoral front, the
Banking, Metal, Realty and Capital Goods sectors corrected
sharply during the week, whereas the FMCG and IT sectors
closed in the positive territory. The Sensex ended with a loss of
2.11% and the Nifty lost 2.18%, vis-à-vis the previous week.
Pattern Formation
The Daily "200 SMA" is placed at 18000 / 5400 level.
The "20 EMA" on the Daily and Weekly chart is placed at
17165 / 5165 and 17300 / 5200, respectively.
We are observing a negative crossover in Daily "RSI -
Smoothened" oscillator and the "ADX (9)" indicator.
The Daily chart depicts the Japanese candlestick patterns
such as "Long Legged Doji" and "Spinning Top" in Sensex and
Nifty, respectively.
Future Outlook
On Friday, indices registered a Weekly low of 17096 / 5142
and closed marginally above the lower level (17165 / 5165)
of the trading range mentioned in our previous report.
Therefore, going forward, this level may act as an important
support. On Wednesday, we observed a negative crossover in
"RSI - Smoothened" oscillator and this crossover is still intact. In
addition, the Daily chart depicts a negative crossover in "ADX
(9)" indicator, which implies that if indices sustain below Friday's
low of 17096 / 5142, then a further fall is expected. In this
case, indices may test crucial support levels of 16900 - 16669/
5085 - 5011. On the other hand, the Daily chart exhibits
Japanese candlestick patterns such as "Long Legged Doji" in
Sensex and "Spinning Top" in Nifty. Both patterns indicate
uncertainty prevailing at current levels and both patterns need
further confirmatory signals. These patterns will be confirmed
ONLY if the indices cross and close above the 17279 / 5199
mark. In such a scenario, indices may rally towards
17400 - 17570 / 5240 - 5285 levels. On the upside,
17700 / 5326 level remains to be a strong resistance.
A sustainable move above this may push indices to test
18000 - 18100 / 5400 - 5450 levels.
Therefore, we reiterate our view that traders should stay light
on positions and continue to adopt a stock-specific approach.
Market in middle of strong support zone of 5150-5200
Nifty spot closed at 5168.85 this week, against a close of 5284.20 last week. The Put-Call Ratio decreased from 1.37 to 1.29 levels
and the annualized Cost of Carry is positive 12.44%. The Open Interest of Nifty Futures increased by 1.88%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR - OI has decreased from 1.37 levels to 1.29 levels. 5200
& 5300 puts have reduced open interest, this was due to mainly
lot of participants who anticipated that market would go up
earlier had shorted this put options and hence had seen some
unwinding by them in last week. There was increase in open
interest visible in 5200 & 5300 call options while the rising
open interest in this is the blend of both buyers and sellers
involved in it. 4800 put has also witnessed significant addition
in OI.
Implied Volatility (IV) has being increased from 20.52% to
22.93%. Historical volatility (HV) for BANKNIFTY is trading at
36.70%. Liquid counters having very high HV are KFA,
IVRCLINFRA, HINDOILEXP, EDUCOMP and PANTALOONR.
Stocks where HV are on lower side are ABGSHIP, ULTRACEMCO,
VIDEOIND, PIRHEALTH and CIPLA.
Nifty futures closed at a Premium of 22.90 points against the
Premium of 32.65 points to its spot. Next month future is trading
with premium of 47.65 points. Counters where CoC is high
are KSOILS, JSWISPAT, NHPC, VIDEOIND and NTPC. Stocks
with negative CoC are PNB, BANKINDIA, INDUSINDBK,
LICHSGFIN and ABAN.
Total open interest of market has increased from `1,22,441.20
crores to `1,27,134.90 crores. Stock futures open interest has
decreased from `33,043/- crores to `32,642/- crores. Frontline
counters which added considerable open interest are
BANKINDIA, SBIN, NTPC, PNB, BHARTIARTL and ONGC. Open
interest was shed in some liquid counters like ORCHIDCHEM,
COALINDIA, RCOM, JSWSTEEL and CROMPGREAV.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The tug of war continues…
Sensex (17193) / Nifty (5169)
This week markets opened on a flat note and then made an
attempt to cross immediate resistance of 17702 / 5326.
However, due to immense selling pressure at these levels,
markets pared gains and a minor recovery during the latter
part of Friday's session pushed indices to close marginally above
the support level of 17165 / 5160. On the sectoral front, the
Banking, Metal, Realty and Capital Goods sectors corrected
sharply during the week, whereas the FMCG and IT sectors
closed in the positive territory. The Sensex ended with a loss of
2.11% and the Nifty lost 2.18%, vis-à-vis the previous week.
Pattern Formation
The Daily "200 SMA" is placed at 18000 / 5400 level.
The "20 EMA" on the Daily and Weekly chart is placed at
17165 / 5165 and 17300 / 5200, respectively.
We are observing a negative crossover in Daily "RSI -
Smoothened" oscillator and the "ADX (9)" indicator.
The Daily chart depicts the Japanese candlestick patterns
such as "Long Legged Doji" and "Spinning Top" in Sensex and
Nifty, respectively.
Future Outlook
On Friday, indices registered a Weekly low of 17096 / 5142
and closed marginally above the lower level (17165 / 5165)
of the trading range mentioned in our previous report.
Therefore, going forward, this level may act as an important
support. On Wednesday, we observed a negative crossover in
"RSI - Smoothened" oscillator and this crossover is still intact. In
addition, the Daily chart depicts a negative crossover in "ADX
(9)" indicator, which implies that if indices sustain below Friday's
low of 17096 / 5142, then a further fall is expected. In this
case, indices may test crucial support levels of 16900 - 16669/
5085 - 5011. On the other hand, the Daily chart exhibits
Japanese candlestick patterns such as "Long Legged Doji" in
Sensex and "Spinning Top" in Nifty. Both patterns indicate
uncertainty prevailing at current levels and both patterns need
further confirmatory signals. These patterns will be confirmed
ONLY if the indices cross and close above the 17279 / 5199
mark. In such a scenario, indices may rally towards
17400 - 17570 / 5240 - 5285 levels. On the upside,
17700 / 5326 level remains to be a strong resistance.
A sustainable move above this may push indices to test
18000 - 18100 / 5400 - 5450 levels.
Therefore, we reiterate our view that traders should stay light
on positions and continue to adopt a stock-specific approach.
Market in middle of strong support zone of 5150-5200
Nifty spot closed at 5168.85 this week, against a close of 5284.20 last week. The Put-Call Ratio decreased from 1.37 to 1.29 levels
and the annualized Cost of Carry is positive 12.44%. The Open Interest of Nifty Futures increased by 1.88%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR - OI has decreased from 1.37 levels to 1.29 levels. 5200
& 5300 puts have reduced open interest, this was due to mainly
lot of participants who anticipated that market would go up
earlier had shorted this put options and hence had seen some
unwinding by them in last week. There was increase in open
interest visible in 5200 & 5300 call options while the rising
open interest in this is the blend of both buyers and sellers
involved in it. 4800 put has also witnessed significant addition
in OI.
Implied Volatility (IV) has being increased from 20.52% to
22.93%. Historical volatility (HV) for BANKNIFTY is trading at
36.70%. Liquid counters having very high HV are KFA,
IVRCLINFRA, HINDOILEXP, EDUCOMP and PANTALOONR.
Stocks where HV are on lower side are ABGSHIP, ULTRACEMCO,
VIDEOIND, PIRHEALTH and CIPLA.
Nifty futures closed at a Premium of 22.90 points against the
Premium of 32.65 points to its spot. Next month future is trading
with premium of 47.65 points. Counters where CoC is high
are KSOILS, JSWISPAT, NHPC, VIDEOIND and NTPC. Stocks
with negative CoC are PNB, BANKINDIA, INDUSINDBK,
LICHSGFIN and ABAN.
Total open interest of market has increased from `1,22,441.20
crores to `1,27,134.90 crores. Stock futures open interest has
decreased from `33,043/- crores to `32,642/- crores. Frontline
counters which added considerable open interest are
BANKINDIA, SBIN, NTPC, PNB, BHARTIARTL and ONGC. Open
interest was shed in some liquid counters like ORCHIDCHEM,
COALINDIA, RCOM, JSWSTEEL and CROMPGREAV.
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