Technical and Derivatives Weekly Review - February 25, 2023

For Private Circulation Only

Technical and Derivatives Review |February 25, 2023

Lowest close in last four months; Nifty enters key support zone

Sensex (59464) / Nifty (17466)

Source: Tradingview.com

Future outlook

Tracking the mixed global cues, the Indian equity market had a decent start to the week. However, there was no follow-up buying

around the 18000 level and prices slipped lower throughout the session. As the week progressed, the sell-off exaggerated once the

17800 support was broken and like a tumbling house of cards, there was selling in the broader markets. Eventually, after five days of

continuous weakness, the prices had the lowest close in the last four months to end a tad above 17450 with a weekly loss of more

than 2.5%

During the mid-week, US bourses turned catalyst to break some important support levels in our market, and from there as the bears

got the grip on the market, they refused to give up. After the major traction seen on the Union Budget Day, the entire February

month has traded in a range and after failing to hold the higher end of the range the prices have now slipped towards the lower end.

Technically, if we see, this lower end around 17400 – 17350 coincides with an ascending trendline and 200SMA support. This set-up

of support is visible in all the major indices and hence the market is at a make-or-break level. Considering the oversold conditions,

we remain hopeful that this key support will be defended and hence we refrain from creating fresh short positions over here. If in

case the support is broken, then the 17200 – 17100 would be the next support to watch out for, where one can pick good quality

propositions in a staggered manner. Immediate resistance is seen around 17600 beyond which some positive developments may

trigger and for the tide to turn back in the bulls' favor will have to close above 17800 on a sustained basis. With global uncertainty,

volatility is likely to remain on the higher side and hence traders are advised to keep a tab on the mentioned levels and trade

accordingly.

For Private Circulation Only

Technical and Derivatives Review |February 25, 2023

Sho

rt Form

ion

Short rollover for key indices

Nifty spot closed at 17465.80 this week, against a close of 17944.20 last week. The Put-Call Ratio has decreased from 0.88 to 0.79 on

Weekly basis. The annualized Cost of Carry is positive at 6.73%. The Open Interest of Nifty Futures increased by 5.05 %.

Derivatives View

Nifty current month’s future closed with a premium of 90.45 against a premium of 114 points to its spot in the previous week. Next

month’s future is trading at a premium of 190.20 points.

The selling extended in the final week to end tad below 17500 mark. During February series, we saw addition of shorts in both the

key indices. Rollover in Nifty and BankNifty stood at 73% and 84% respectively, which is below the three-month average figure.

However, we saw open interest addition series on series and especially banking index which added more than 35%, suggesting

decent amount of positions have been rolled over to March series. Stronger hands have been adding shorts and they also preferred

rolling over same hence their index futures ‘Long Short Ratio’ declined to 18% from 23% on a weekly basis. The above data hints,

decent portion of shorts are intact in system and considering FIIs LSR, we believe market is extremely oversold for now. Hence,

traders should lighten up shorts if any.

Scrip

Futures

Chg (%)

Price

Chg(%)

PEL 5861350 16.89 800.00 (7.92)

NMDC 45787500 11.86 112.75 (7.20)

JUBLFOOD 14915000 10.38 443.45 (2.78)

ADANIENT 13792000 9.95 1318.55 (23.52)

ABFRL 21135400 6.61 231.50 (11.66)

Weekly change in OI

Long Formation

Scrip

Futures

Chg (%)

Price

Chg(%)

GAIL 65797650 18.72 104.10 8.21

GNFC 8216000 5.30 554.30 2.12

NTPC 73370400 0.89 171.95 2.20

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For Private Circulation Only

Technical and Derivatives Review |February 25, 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 25, 2023

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