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Covid fears drag Nifty towards 17800
Sensex (59845) / Nifty (17807)
Source: Tradingview.com
Future outlook
Markets started the session on a flat note on Monday in line with other global peers. During the first half of the week, Nifty tried
recovering from previous Friday’s weakness. However, at higher levels, once again markets looked a bit nervous. The profit booking
started on Wednesday after entering the sturdy wall of 18450 – 18500. This initial decline got converted into a brutal selling in last
couple of sessions as COVID concerns once again started haunting market participants on the domestic front. In this course of
action, we kept thrashing all key levels one after another. Eventually, Nifty concluded the week at 17800 by shedding over two and
half a percent from previous weekly close.
It was certainly a disappointing end for our markets. Globally things did not look bad; but in our domestic markets, the reaction was
lethal towards the fag end of the week. As we are about to step into the final week of the calendar year 2022, the world is
celebrating the ‘Christmas’ festival and generally, around this time, it is best known for Santa rally in our markets especially the
broader end of the spectrum. Unfortunately, Mid and small cap space are most affected pockets in last 2 – 3 sessions. It would be
interesting to see whether market obliges its historical symmetry or not. The way markets have closed, the possibility is very
miniscule. Since we have witnessed this sell off on the back of COVID fears, all developments with respect to this are likely to be
crucial. Only if we see participants considering this as an overreaction, we may see relief in the coming week. However, in case of
any aberration, we must prepare ourselves for lower levels.
Taking a glance at the daily and weekly time frame charts, we are at the cluster of multiple technical evidence. We reckon the
downside is limited from hereon and hopefully the expectation becomes reality in coming sessions. As far as levels are concerned,
17900 – 18050 are to be seen as immediate hurdles and only a close above the upper range would confirm the resumption of higher
degree uptrend. On the flipside, an extended correction below 17750 – 17700 would drag Nifty towards next important support
zone of 17600 – 17450. Let’s see how things pan out going ahead. Traders are advised to avoid carrying aggrieve bets for a while and
wait for Nifty to reclaim 18050 to regain the strength. In any scenario, it’s an excellent opportunity for investors to start nibbling into
quality propositions as most of the counters are significantly off their recent highs.
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Sho
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ion
Nifty tanks below the psychological mark of 18000
Nifty spot closed at 17806.80 this week, against a close of 18269 last week. The Put-Call Ratio has decreased from 0.81 to 0.72 on
Weekly basis. The annualized Cost of Carry is positive at 19.51%. The Open Interest of Nifty Futures increased by 9.16%.
Derivatives View
Nifty current month’s future closed with a premium of 57.10 against a premium of 59.65 points to its spot in the previous week.
Next month’s future is trading at a premium of 166.50 points.
The rising concern over the COVID has triggered fear in the market. Its third straight week, wherein the benchmark index has
corrected to plunged below the psychological mark of 18000. With no sign of rebound, we ended the final day of week tad table
18600 with a cut of 2.53% WoW. In F&O space, we saw some short formation in Nifty and in case of banking index some profit
booking was observed. Stronger hands too preferred unwinding longs and added few bearish bets in index futures segment, their
‘Long Short Ratio’ has plunged further to 44% from 55% seen last Friday. The PCR-OI has declined to oversold territory and the
volatility index surged almost 15% during the week and is now placed near a hurdle of 16-17. In addition, we haven’t seen any
massive shorts except for Friday. For the coming week, we would advise to be more watchful and selective while trading any trades
and at the same time would be hopeful to see some respite after last three weeks pain.
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
LICHSGFIN 14916000 35.48 394.95 (2.07)
TORNTPHARM 1923000 30.68 1567.85 (2.46)
MFSL 6844500 27.54 671.35 (5.15)
M&MFIN 24960000 18.99 220.60 (6.09)
VOLTAS 7393800 18.55 778.05 (6.93)
Weekly change in OI
Long Fo
rmation
Scrip
OI
Futures
OI
Chg (%)
Price
Price
Chg(%)
ABBOTINDIA 48160 10.16 21822.05 5.23
ZYDUSLIFE 9995400 8.78 420.55 2.89
LALPATHLAB 1697250 8.12 2345.70 4.60
NESTLEIND 280920 6.36 20202.75 1.85
IPCALAB 2008500 6.19 864.85 1.16
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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.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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