Technical and Derivatives Weekly Review - May 19, 2023

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Technical and Derivatives Review |May 19, 2023

Amidst profit-booking, Nifty withheld 18200

Sensex (61730) / Nifty (18203)

Source: Tradingview.com

Future outlook

The Indian equity markets had a strong start to the week, with the Nifty50 index soaring to new highs of the calendar year

(18458.90) and levitating the market sentiments. However, the grip got loosened from the bulls at the highs and the market slid to a

lower zone throughout the week. Eventually, some sign of relief was seen at the last trading session as Nifty precisely rebounded

from the 20-EMA on the daily chart and had a positive closure. Amidst all the hustles, Nifty concluded the week with a cut of nearly

0.60 percent and settled a tad above the 18200 level.

Technically, the recent correction was certainly expected post the decent run and the overall chart structure remains robust, with

bulls firmly able to withhold the pivotal support. Even on the hourly chart, the formation of the ‘Wolfe Wave’ pattern with the

positive divergence in the RSI-smoothened contributes to the positive development for the index, and we may expect the runup to

continue in the coming period. On the technical levels, the 18050-18000 was firmly safeguarded, showcasing the importance of

pivotal support and is expected to act as a sheet anchor in the comparable period. On the higher end, 18400-18450 is likely to act as

the sturdy wall and a decisive breach would only trigger fresh longs in the system in the future.

Going forward, we remain sanguine with a robust approach post the price-wise correction in the index. Also, the banking index is

nearing the lifetime high zone, and any breach could contribute to the upliftment of the market sentiments. Simultaneously, amidst

the broader market participation, one needs to keep a stock-centric approach for better trading opportunities and stay abreast of

global developments.

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Technical and Derivatives Review |May 19, 2023

Sho

Form

ion

Long Short Ratio marginally improved on WoW basis

Nifty spot closed at 18203.40 this week, against a close of 18314.80 last week. The Put-Call Ratio has decreased from 1.24 to 1.01 on

Weekly basis. The annualized Cost of Carry is positive at 7.35%. The Open Interest of Nifty Futures decreased by 2.82%.

Derivatives View

Nifty current month’s future closed with a premium of 22 against a premium of 18.60 points to its spot in the previous week. Next

month’s future is trading at a premium of 98.35 points.

The Indian equity markets had a positive start for the week but failed to capitalize on the gains and underwent profit-booking from

the highs. The benchmark index Nifty50 witnessed long unwinding on a weekly basis and shed 0.61% to settle a tad above the 18200

(spot) level. In the F&O segment, we saw mixed trade in the key indices, wherein the Banking index had a long formation on a

weekly basis. On the options front, the put writers added a good amount of positions in 18200-18000 strikes, and on the other side,

build-up remained scattered in 18200-18500 call options. The stronger hands were quite robust in the cash segment with their

consecutive buying except for the last day; also, they added a few longs in the index futures segment in the previous week. Their

Long Short Ratio’ advanced slightly to 48% from 46% WoW. Considering the above data point, we expect a range-bound movement

in the index with a bullish undertone and expect any dip toward the support to augur well for the bulls.

Scrip

Futures

Chg (%)

Price

Chg(%)

ATUL 256800 26.72 6591.55 (4.91)

JINDALSTEL 22131250 26.27 523.50 (8.97)

GAIL 73309800 25.66 105.00 (3.00)

INDIAMART 378300 19.47 5604.75 (5.57)

DIVISLAB 4368250 17.02 3080.15 (6.79)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

ASHOKLEY 54420000 28.97 154.65 2.86

RAMCOCEM 4751500 27.42 842.35 9.50

EXIDEIND 25344000 23.40 204.35 7.24

DIXON 1089075 19.79 3043.65 5.95

PERSISTENT 1224300 13.46 4871.80 4.41

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Technical and Derivatives Review |May 19, 2023

Sameet Chavan Head Research – 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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