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17750 to be seen as key pivotal point
Sensex (59900) / Nifty (17859)
Source: Tradingview.com
Future outlook
The SGX Nifty had indicated a soft opening for new calendar year. However, our markets completely shrugged off these cues as they
started the session marginally in the green on Monday. We did see some ambiguity in the first half; but with few heavyweights
attracting strong buying around the midsession, Nifty picked up decent momentum in the upward direction. Eventually, we ended
the inaugural session around day’s high by adding half a percent to previous close. The following session looked promising; but Nifty
was struggling to surpass the sturdy wall around 18250 – 18300. Finally, this failure translated into a price drop around the mid-
week. The selling augmented towards the fag end of the week and in the process, we went on to slide below 17900 during Friday’s
session.
The start was promising but the end was certainly disappointing for the opening week of the calendar year 2023. The benchmark
index Nifty gave up all previous week’s gain and has closed around the lower end of the recent trading range. Now taking a glance at
daily time frame chart, undoubtedly the price structure looks a bit weak and in fact, the price decline in last two sessions has
certainly caught us on the wrong foot as we were not expecting Nifty to slide below the 18000 mark. Nevertheless, previous week’s
low of 17750 would now be seen as a crucial pivotal point for our market. As of now, we are still a bit hopeful of recovery; but in
case, if Nifty slides and sustains below 17750, we must prepare for extension of this corrective move towards 17600 – 17450 in
coming week. On the flipside, in order to regain the strength, Nifty must reclaim 18000 first on a closing basis. The major trend
deciding level remains at 18300, which would turn the tide once again in favor of bulls.
Traders are advised to keep a close tab on all these above-mentioned scenarios. The only positive takeaway at the end of the week
would be the resilience of the broader market. Unlike last-to-last week’s decline, this time, the Nifty MIDCAP50 index remained firm
and did not participate in this week’s hammering. In case of recovery, the broader end of the spectrum would outperform
heavyweights and we would probably then witness a beginning of the pre-budget rally. Also, with result season kicking in on
Monday, all focus would first be on major IT heavyweights, which would dictate the near-term direction for this underperforming
space.
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Sho
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PCR-OI and FIIs positioning hints market is a bit oversold
Nifty spot closed at 17859.45 this week, against a close of 18105.30 last week. The Put-Call Ratio has decreased from 0.88 to 0.75 on
Weekly basis. The annualized Cost of Carry is positive at 9.01%. The Open Interest of Nifty Futures increased by 11.19%.
Derivatives View
Nifty current month’s future closed with a premium of 83.75 against a premium of 166.50 points to its spot in the previous week.
Next month’s future is trading at a premium of 148.90 points.
Post selling seen on the final trading day of calendar year 2022, market rebounded back to reclaim 18200. But once again, we
witnessed decent selling pressure and this time every pull back move was being sold into to correct for three straight sessions to
almost touch previous swing lows. In F&O space, we observed mixed bets but considering the price action for major part of the week
it seems decent short have been added in both the indices. Stronger hands continued with their selling streak in our Indian equities
market, they sold to the tune of Rs. 7813 crores. On the net basis, addition of bearish bets was seen in index futures hence the Long
Short Ratio has plunged to 41% from 50%. At current juncture, PCR-OI and FIIs LSR clearly suggest market is a bit oversold and
positive trigger can lead to a short covering rally. Traders for now are advised to be very selective and avoid taking undue risk.
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
ATUL 121275 32.43 7802.00 (5.51)
COALINDIA 30353400 26.90 214.05 (5.33)
AUBANK 9777000 25.09 619.45 (4.49)
NAUKRI 1429000 22.89 3685.40 (6.43)
CHOLAFIN 8022500 20.55 669.70 (7.84)
Weekly change in OI
Long Fo
rmation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
MANAPPURAM 48048000 24.44 119.15 1.84
ASTRAL 1703075 22.54 2070.85 5.07
GNFC 8416200 20.90 591.20 5.51
GODREJCP 5851000 20.54 920.30 4.66
PFC 66457800 18.19 157.65 10.98
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Sameet Chavan
C
hief An
alyst
–
T
e
chnical
& 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.krisha[email protected]
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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