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The bears kick-started the week on Monday with a substantial
downside gap on the back of extreme negative sentiments across
the globe. Selling pressure was so intense that the Nifty failed
to hold its important level of 61296129612961296129. Despite an unfavorable
outcome from the RBI Monetary policy, the Nifty somehow
managed to hold the 61006100610061006100 mark until Thursday's session. The
concluding session of the week traded within a narrow range
and eventually ended with negligible gains. On a weekly basis,
all the sectors closed well inside the negative territory with the
Realty, Banking and Metal counters being the major losers. The
Sensex and the Nifty shed 2.93% and 2.83%, respectively, over
the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
20634 / 613520634 / 613520634 / 613520634 / 613520634 / 6135 and 19395 / 581319395 / 581319395 / 581319395 / 581319395 / 5813 levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
20898 / 620520898 / 620520898 / 620520898 / 620520898 / 6205 and 20582 / 612120582 / 612120582 / 612120582 / 612120582 / 6121 levels, respectively.
The 'Shooting Star' pattern on the weekly chart has now
been confirmed.
The Weekly 'RSI-Smoothened' and the 'ADX (9)' indicator
are now signaling a negative crossover.
Future outlook
A sudden shift in traders' sentiments was influenced by domestic
as well as global developments. In our previous weekly report,
we had clearly mentioned that the bulls were struggling at higher
levels and that the bears had started gaining strength. This was
reflected in Monday's session as the Nifty opened substantially
lower and confirmed the 'Shooting Star' Japanese candlestick
pattern formed during the previous week. In-line with our
expectations, the Nifty slid towards the mentioned targets of
6129 - 60506129 - 60506129 - 60506129 - 60506129 - 6050. In the process, our market has now finally
managed to come out of the congestion zone. A closing below
Source: Falcon
Exhibit 1: Nifty weekly chart
1
Source: Falcon
Exhibit 2: Nifty Daily chart
Market out of the congestion zone
Sensex (20498) / Nifty (6090)
the weekly '20 EMA' coupled with the negative placement of
the weekly 'RSI-Smoothened' and the 'ADX (9)' indicator suggests
higher possibilities of interemediate-term weakness. Considering
these evidences, we expect the Nifty to initially test the crucial
support level of 59705970597059705970 and may even slide towards 5850 - 58205850 - 58205850 - 58205850 - 58205850 - 5820
levels, if it sustains below 59705970597059705970 over the next 3 weeks. On the
other hand, Thursday's 'Bullish Hammer' pattern does not ruleout the possibilities of a near-term bounce towards 6150 - 61806150 - 61806150 - 61806150 - 61806150 - 6180
levels. We expect the Banking, Oil & Gas and Metal counters to
remain under pressure; whereas the IT and Healthcare sectors
may remain to be a safe bet for traders.
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Technical Research Team
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS21,136 20,817 20,580 20,262 20,025
6,258 6,166 6,097 6,004 5,935
11,053 10,603 10,352 9,902 9,651
1,022 1,002 986 967 951
165 161 158 154 151
496 487 475 466 455
1,211 1,160 1,132 1,081 1,054
2,010 1,965 1,924 1,879 1,838
618 575 550 506 482
322 316 308 301 293
185 179 170 164 155
379 366 349 336 319
329 325 322 319 316427 420 414 407 400
260 253 249 242 238
156 145 139 129 123
2,713 2,667 2,640 2,593 2,567
364 357 349 342 333
2,659 2,624 2,590 2,555 2,521
1,474 1,454 1,425 1,406 1,377
863 846 828 811 793
679 655 641 618 604
2,138 2,068 2,024 1,954 1,910
118 113 110 105 103
600 585 570 555 540
1,068 1,021 992 946 917
100 96 93 89 87
427 403 386 362 345
3,818 3,761 3,707 3,651 3,597
334 329 324 319 313
267 258 253 245 239
49 44 41 37 34
697 673 659 636 622
1,019 1,000 987 967 954
944 907 881 844 819
905 886 868 850 832
1,858 1,747 1,644 1,533 1,429
148 145 142 139 137
135 131 129 126 123
285 279 275 268 265
593 555 535 498 478
100 98 97 94 93
350 337 321 307 292
875 850 836 811 797
405 385 371 351 337
1,670 1,593 1,552 1,475 1,434
212 200 191 179 170
630 612 596 578 562
380 371 358 349 336
77 74 73 71 69
381 364 352 335 324
2,292 2,255 2,222 2,185 2,153
1,759 1,723 1,692 1,656 1,625
R2R2R2R2R2 R1R1R1R1R1 PIVPIVPIVPIVPIVOOOOOTTTTT S1S1S1S1S1 S2S2S2S2S2SENSEX
NIFTY
BANKNIFTY
ACC
AMBUJACEM
ASIANPAINT
AXISBANK
BAJAJ-AUTO
BANKBARODA
BHARTIARTL
BHEL
BPCL
CAIRNCIPLA
COALINDIA
DLF
DRREDDY
GAIL
GRASIM
HCLTECH
HDFC
HDFCBANK
HEROMOTOCO
HINDALCO
HINDUNILVR
ICICIBANK
IDFC
INDUSINDBK
INFY
ITC
JINDALSTEL
JPASSOCIAT
KOTAKBANK
LT
LUPIN
M&M
MARUTI
NMDC
NTPC
ONGC
PNB
POWERGRID
RANBAXY
RELIANCE
RELINFRA
SBIN
SESAGOA
SUNPHARMA
TATAMOTORS
TATAPOWER
TATASTEEL
TCS
ULTRACEMCO
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Derivatives Review |Derivatives Review |Derivatives Review |Derivatives Review |Derivatives Review |
Wait and watch, don't short aggressively
Nifty spot closed at 6089.506089.506089.506089.506089.50 this week, against a close of 6261.656261.656261.656261.656261.65 last week. The Put-Call Ratio has increased from0.990.990.990.990.99 to 1.071.071.071.071.07
levels and the annualized Cost of Carry is positive 5.19%5.19%5.19%5.19%5.19%. The Open Interest of Nifty Futures decreased by 18.59%18.59%18.59%18.59%18.59%.
Put-Call Ratio Analysis Implied Volatility Analysis
PCR-OI has increased from 0.99 to 1.07 levels. This ratio has
mainly increased due to significant amount of buildup in put
options in 6000 & 5700 strike, good amount of buildup was
also added by 5800, 5900 & 6100 strikes. In call option
reasonable amount of buildup was seen in 6000 & 6300 strikes
last week. Highest buildup is seen in 6300 call & 6000 put
options.
Implied Volatility (IV) for NIFTY has increased from 13.44%.to
15.37%. Historical volatility (HV) is at 17.39% and that for
BANKNIFTY is trading at 31.88%. Liquid counters having very
high HV are RANBAXY, HDIL, BANKINDIA, JPASSOCIAT and
JPPOWER. Stocks where HV are on lower side are DRREDDY,
HINDUNILVR, CAIRN, GRASIM and COLPAL.
Nifty futures closed at the premium of 22.50 against the
premium of 39.15 points to its spot. Next month future is trading
with premium of 58.85 points. Liquid counters where CoC is
high are JPPOWER, ADANIPOWER, FEDERALBNK, JISLJALEQS
and KTKBANK. Stocks with negative CoC are BHEL, PFC, SAIL,
RECLTD and NMDC.
Total open interest of market has decreased from
`1,44,759/- cr. to`1,08,019/- cr. Stock futures open interest
has decreased from`36,608/- cr. to`32,250/- cr. Some of the
large caps which added open interest are TATAMOTORS,
HEROMOTOCO, RELIANCE and BANKBARODA. Open interest
was shed in large cap names like COALINDIA, MARUTI,
RANBAXY, JPASSOCIAT and BHEL.
Open Interest Analysis Cost-of-Carry Analysis
Scrip :Scrip :Scrip :Scrip :Scrip : BANKNIFTY CMP :CMP :CMP :CMP :CMP :10276.65 LLLLLot Size : 25ot Size : 25ot Size : 25ot Size : 25ot Size : 25 Exercise Date (F & O) : Exercise Date (F & O) : Exercise Date (F & O) : Exercise Date (F & O) : Exercise Date (F & O) :
26th. Feb 2014
Expected PayoffView: Mildly Bearish
8500
8900
9300
9700
10100
10500
UBEP -UBEP -UBEP -UBEP -UBEP - `9945/-
LBEP -LBEP -LBEP -LBEP -LBEP -`
9055/-
Max. Risk:Max. Risk:Max. Risk:Max. Risk:Max. Risk: Unlimited Max. PMax. PMax. PMax. PMax. Profit:rofit:rofit:rofit:rofit:`11,125/-
If BANKNIFTY continues to move below LBEP. If BANKNIFTY closes at 9500 on expiry.
NONONONONOTETETETETE::::: Profit can be booked before expiry if BANKNIFTY moves in favorable directions and time value decays.
Strategy: Ratio Put Spread
Buy/SellBuy/SellBuy/SellBuy/SellBuy/Sell QtyQtyQtyQtyQty ScripScripScripScripScrip StrikeStrikeStrikeStrikeStrike SeriesSeriesSeriesSeriesSeries OptionOptionOptionOptionOption Buy/Sell RateBuy/Sell RateBuy/Sell RateBuy/Sell RateBuy/Sell Rate
PPPPPricericericericerice TTTTTypeypeypeypeype (((((`````)))))
BUY 25 BANKNIFTY 10000 JAN PE 175.00
SELL 50 BANKNIFTY 9500 JAN PE 60.00
Closing PClosing PClosing PClosing PClosing Pricericericericerice ExpectedExpectedExpectedExpectedExpected ( ( ( ( (`````))))) PPPPProfit/Lrofit/Lrofit/Lrofit/Lrofit/Lossossossossoss
(`555.00)
(`155.00)
`245.00
`245.00
(`55.00)
(`55.00)
Derivative Strategy
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Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)Reduce (-5% to -15%) Sell (< -15%)
Ratings (Returns) :
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