Technical and Derivatives Weekly Review - February 17, 2023

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Technical and Derivatives Review |February 17, 2023

Lack of follow-up buying nullified the breakout attempt, Nifty slipped below 18000

Sensex (61003) / Nifty (17944)

Source: Tradingview.com

Future outlook

In continuation of the lacklusterness from the past couple of trading weeks, our market started the new week on a mild note within

the same slender range. However, by mid-week, the buying emergence in the broader market led Nifty to break the shackles and

come out from the slumber phase. But eventually, the bulls failed to capitalize on the gains and by the weekend, Nifty re-entered its

congestion zone. Post the intense tug of war throughout the week, Nifty settled around 17950 levels, procuring nearly half a percent

from the previous week’s closure.

The lack of follow-up buying nullified the breakout attempt, and we fell back into the same zone from where we had started.

However, the recent price action could be seen as constructive development for our markets as the index is hovering above the

sloping trend line and has also attempted to transcend the sturdy hurdle of the 18000 mark after two weeks of consolidation. As far

as levels are concerned, we remain hopeful till the sacrosanct support of 17800-17700 is firmly withheld. On the flip side,

sustenance above 18000 could only bring the cheer back in the market, while on the higher end 18200 is likely to be the sturdy wall

in a comparable period.

We remain sanguine with the up trend and would advise the traders to utilize the dips to add long position in the index. Meanwhile,

a positive contribution from the high beta Banking space could provide the much-needed thrust in the up move. However, despite

the lackluster moves in the indices, individual pockets kept buzzing and we expect this to continue. Hence, we advocate traders to

focus on a stock-specific approach for better trading opportunities and stay with a similar buy on decline strategy till the time

important supports are held comfortably.

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Technical and Derivatives Review |February 17, 2023

Sho

rt Form

ion

Market remains indecisive, amidst mixed F&O data

Nifty spot closed at 17944.20 this week, against a close of 17856.50 last week. The Put-Call Ratio has decreased from 1.05 to 0.88 on

Weekly basis. The annualized Cost of Carry is positive at 2.31%. The Open Interest of Nifty Futures decreased by 2.54%.

Derivatives View

Nifty current month’s future closed with a premium of 6.80 against a premium of 20.60 points to its spot in the previous week. Next

month’s future is trading at a premium of 114 points.

The Indian benchmark index attempted to break shackles and come out of the slumber phase, but lack of follow-up buying nullified

the attempt and the index slipped back into the congestion zone. In the F&O segment, we witnessed strong short covering by mid-

week, but on the last trading session some short formation was seen, which dampened the overall sentiments. On the options front,

a decent piling of OI is seen at 17900-17800 put strikes, suggesting nearby support for Nifty. On the flip side, the 18000-call strike

has the highest OI concentration, followed by 18100-18200 CE, suggesting a series of resistance in the comparable period. The

stronger hands have covered some of their shorts in the system, resulting in an improvement of the ‘Long Short Ratio,’ which surged

to 23% from 18% in the last week. Considering the recent price action, a short covering rally could be an encouraging sign for our

markets. Hence, we must keep a close tab on the mentioned levels and act accordingly.

Scrip

Futures

Chg (%)

Price

Chg(%)

CROMPTON 7278000 89.31 298.05 (6.67)

INDIGO 4842000 43.89 1882.70 (7.53)

AUBANK 12842000 32.53 610.85 (6.10)

LICHSGFIN 15264000 30.82 366.85 (3.28)

BIOCON 38435300 29.13 232.50 (4.46)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

SHREECEM 381125 30.91 25599.15 7.24

METROPOLIS 1230400 30.78 1341.60 4.29

TORNTPOWER 4212000 26.20 508.30 12.08

ONGC 46280850 24.60 156.80 6.67

ITC 65849600 19.34 382.60 4.34

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Technical and Derivatives Review |February 17, 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 17, 2023

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