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Technical and Derivatives Review |February 05, 2023
Some respite to Adani saga, Nifty reclaims 17800
Sensex (60842) / Nifty (17854)
Source: Tradingview.com
Future outlook
Last week, the Adani group fiasco struck our markets like a comet. The spillover effect of this carnage triggered massive sell off in
banking space which then spread across the broader market. Around the mid-week, the Finance Minister delivered a stellar ‘Budget’
and markets gave a complete thumbs up to this event. We hastened towards 18000 on the same day itself; but once again, the
escalating dark clouds with respect to Adani group poured complete water on this optimism. Our markets took a nosedive to not
only pare down gains but also ended well inside the negative terrain. Fortunately, things cooled off a bit towards the fag end of the
week, which resulted in a smart recovery to reclaim the 17800 mark on a closing basis.
Although, we managed to recover lost ground this week, we are still not completely out of the woods yet. A continuous news-flow
with respect to the Adani group is likely to give volatile swings on both sides. As far as levels are concerned, the immediate support
is visible around 17600; but the major sacrosanct zone remains at 17400 – 17300, which coincides with the ‘200-day SMA’. Ideally,
till the time we defend this, there is no real reason to worry for. On the flipside, if we have to regain the lost pride, the Nifty needs to
surpass 18000 – 18100 on a closing basis. This will confirm the completion of recent corrective phase and market then can resume
the higher degree uptrend.
Traders are advised to keep a close tab on all these above-mentioned scenarios and should remain updated on the global as well as
domestic developments. The banking space needs to be closely watched; because it is likely to act as a catalyst for setting the near-
term direction for our market. Apart from this, a lot of thematic moves started playing out well towards the end of the week. One
must keep focusing on such potential trading opportunities.
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Technical and Derivatives Review |February 05, 2023
Sho
rt Form
at
ion
FIIs positioning looks short heavy
Nifty spot closed at 17854.05 this week, against a close of 17604.35 last week. The Put-Call Ratio has increased from 0.74 to 1.17 on
Weekly basis. The annualized Cost of Carry is positive at 4.92%. The Open Interest of Nifty Futures decreased by 4.53%.
Derivatives View
Nifty current month’s future closed with a premium of 48.10 against a premium of 103.95 points to its spot in the previous week.
Next month’s future is trading at a premium of 142.85 points.
The Indian equity market sharp surge during the week to reclaim 18000 during the Budget announcement but this got sold into
same day to drag index towards 17400. Last two sessions, we witnessed a steady recovery to eventually conclude the week around
17850. In F&O space, open interest reduction was seen in both the key indices. On Friday, massive writing was seen in 17500-17700
put strikes. On the other side, 18000-18300 strikes added decent positions. Highest open interest concentration now seen in 17600
put and 18000 call strike. On net basis, FIIs added shorts in index futures resulting Long Short Ratio declining further to 19% from
25%. However, their positioning looks a bit oversold lately and any short covering shall be an encouraging sign for our market.
Currently, 17500-17600 should be acting as a support zone, whereas resistance is placed in the vicinity of 18000.
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
HDFCLIFE 24366100 72.23 491.15 (16.75)
WHIRLPOOL 1077650 46.69 1263.55 (9.62)
DIVISLAB 3385650 32.19 2894.70 (14.75)
SBILIFE 7768500 26.15 1142.90 (8.99)
POWERGRID 30566700 24.22 215.95 (1.26)
Weekly change in OI
Long Formation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
DALBHARAT 1594500 31.72 1876.75 10.08
CHOLAFIN 10807500 29.47 783.85 10.42
M&MFIN 27072000 25.64 243.25 7.04
CANFINHOME 3980925 20.62 580.80 7.07
BRITANNIA 1712200 18.99 4648.15 5.37
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Technical and Derivatives Review |February 05, 2023
Sameet Chavan Chief Analyst – Technical & Derivatives 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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Technical and Derivatives Review |February 05, 2023
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