EQLINE RESEARCH

EQLINE RESEARCH
EQLine Research and Services Pvt Ltd
Technical Picks | October 25, 2014
Bulls defended successfully - next hurdle at 8050
Sensex (26787) / Nifty (7996)
Exhibit 1: Nifty Weekly chart
Trading on Monday kicked off with a decent upside gap owing
to stellar performance by the Bhartiya Janata Party (BJP) in the
Maharashtra and Haryana Assembly election coupled with the
Oil & Gas reforms announced by the government on Saturday
in the previous week. Subsequently, the Nifty traded within a
narrow range throughout the remaining session and closed
with over a percent of gains. The Nifty opened with an upside
gap on Tuesday and Wednesday as well and then remained
range bound for the rest of the day. All the three trading session
of the week closed well inside the positive territory with the
Source: Falcon
Nifty concluding trading on Wednesday at the highest point of
the week. All the sectors closed in the green for the week
among which the Capital Goods, Banking, Auto and Oil &
Exhibit 2: Nifty Daily chart
Gas sectors were the major gainers. The Nifty ended the week
with a decent gain of 2.78% over the previous week's closing.
Pattern formation:
The '89-day EMA' and the '89-week EMA' are placed at
25856 / 7732
and 22523 / 6738
levels, respectively.
The '20-day EMA' and the '20-week EMA' are placed at
26478 / 7918
and 25835 / 7726
levels, respectively.
Future outlook
Source: Falcon
It's been a dream run for our equity bourses over the past few
ongoing momentum and the positive placement of the daily
months. Our benchmark index (Nifty) has appreciated by 30%
'RSI-Smoothened' momentum oscillator, the Nifty may extend
since last Diwali, which is a great achievement for our market.
its gains towards 8050 - 8080. But since we are observing
The concluded week was truncated on the back of Diwali
a cluster of resistances around 8050 - 80808050 -
festival; but despite this, we witnessed a strong up move across
advise short term traders to lighten up their existing long
the broader market. In our earlier report, we had mentioned
positions in the Nifty around above mentioned levels and stay
about 7700
on the sidelines until the next technical development happens.
expected, the daily '89 EMA' placed around 7700 played a
However, it's advisable to continue with a stock specific
sheet anchor role for the bulls. We had also mentioned about
approach. On the flipside, 7900 - 7860
the 'Falling Wedge' pattern along with the positive crossover in
a strong supports for the Nifty in the coming week.
daily momentum oscillators. All these technical evidences
We would like to take this opportunity to wish everyone a Happy
proved their significance during the week as the Nifty precisely
, we would
Diwali and Prosperous New Year.
met with our target of 7980. Going forward, looking at the
212/4B, Ramani Srinivasan IInd street, Venkateswara Nagar, New Perungalathur, Chennai 600063. Ph: +919444119602
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EQLine Research and Services Pvt Ltd
Technical Picks | October 25, 2014
Weekly Pivot Levels For Nifty 50 Stocks
SCRIPS
SENSEX
NIFTY
BANKNIFTY
ACC
S2
26,209
S1
26,498
PIVOT
26,658
R1
26,947
R2
27,108
7,805
7,900
7,953
8,048
8,101
15,976
16,210
16,391
16,626
16,807
1,378
1,426
1,453
1,501
1,529
AMBUJACEM
206
211
215
220
224
ASIANPAINT
621
632
645
657
670
AXISBANK
403
414
421
432
BAJAJ-AUTO
2,334
2,415
2,462
2,542
439
2,589
BANKBARODA
853
871
884
901
914
BHEL
217
229
237
249
256
BPCL
664
676
696
708
728
BHARTIARTL
391
400
408
417
424
CAIRN
267
278
284
295
301
CIPLA
586
607
621
642
655
COALINDIA
342
347
357
363
372
DLF
102
111
117
126
2,961
3,005
DRREDDY
2,884
3,082
132
3,127
462
475
GRASIM
3,259
3,326
3,372
3,439
3,486
HCLTECH
1,454
1,539
1,564
GAIL
440
496
510
1,484
1,509
HDFCBANK
875
884
897
HDFC
996
1,013
1,024
1,042
1,053
3,215
3,314
906
2,922
3,021
HINDALCO
138
143
147
152
HINDUNILVR
717
737
748
769
1,533
1,564
HEROMOTOCO
ICICIBANK
2,729
1,495
1,601
IDFC
135
140
144
149
INDUSINDBK
654
669
678
693
3,717
3,790
INFY
3,637
3,869
919
156
780
1,632
153
702
3,942
ITC
342
345
352
355
JINDALSTEL
113
137
151
175
KOTAKBANK
976
1,019
1,044
1,087
1,112
361
189
LT
1,448
1,501
1,530
1,583
1,613
LUPIN
1,325
1,357
1,378
1,410
1,431
M&M
1,196
1,228
1,255
1,287
1,313
MARUTI
2,904
3,040
3,115
3,251
3,326
NMDC
156
158
162
164
168
NTPC
138
142
145
150
153
ONGC
376
388
408
420
441
POWERGRID
130
135
138
143
PNB
884
909
942
967
RELIANCE
897
921
936
960
SSLT
225
237
245
258
2,547
2,581
SBIN
SUNPHARMA
TCS
2,520
782
2,375
794
804
2,413
2,453
2,608
817
2,492
146
1,000
975
266
2,641
827
2,532
496
508
84
86
87
89
91
439
448
455
465
472
TECHM
2,201
2,268
2,318
2,384
2,434
ULTRACEMCO
2,341
2,371
2,420
2,450
2,499
WIPRO
541
562
575
596
608
ZEEL
310
325
335
350
361
TATAMOTORS
TATAPOWER
TATASTEEL
472
532
212/4B, Ramani Srinivasan IInd street, Venkateswara Nagar, New Perungalathur, Chennai 600063. Ph: +919444119602
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EQLine Research and Services Pvt Ltd
FIIs forming long Index Futures; don't short
Nifty spot closed at 7995.90 this week against a close of 7779.70 last week. The Put-Call Ratio has increased from 0.84 to 0.87
levels and the annualized Cost of Carry is positive at 10.21%. The Open Interest of Nifty Futures increased by 15.02%.
Put-Call Ratio Analysis
Implied Volatility Analysis
PCR-OI has increased from 0.84 to 0.87 mainly due to
Implied Volatility (IV) for NIFTY has decreased from 15.22%.to
significant amount of unwinding in call options. 7700 put options
11.02%. Historical volatility (HV) of NIFTY is at 16.58% and
added maximum buildup followed by good amount of unwinding
that for BANKNIFTY is trading at 27.54%. Liquid counters
in 7900-8100 strike prices. On the other hand in call options
having very high HV are DLF, JPASSOCIAT, JINDALSTEL,
8200 strike price added some open interest followed by
UNITECH and GMRINFRA. Stocks where HV are on lower
significant unwinding in the range of 7700-8000 call options.
side are HINDUNILVR, ITC, COLPAL, DABUR and HDFCBANK.
Maximum buildup in current series has shifted from 8000 to
8100 call options & of put options is at 7700 strike price.
Open Interest Analysis
Cost-of-Carry Analysis
Total open interest of market has increased from
Nifty current month futures closed at a premium of 17.90
Rs2,14,628/- cr. to Rs2,23,491/- cr. Stock futures open interest
points against the premium of 37.35 points to its spot. Next
has increased from Rs54,189/- cr. to Rs58,120/- cr. Large cap
month future is trading with premium of 61.50 points. Liquid
names which added significant positions last week are GAIL,
counters where CoC is high are JPPOWER, IBREALEST, SUNTV,
M&M, MARUTI, BAJAJ-AUTO and KOTAKBANK. On the other
NHPC and HDFCBANK. Stocks with negative CoC are SAIL,
hand unwinding was visible in counters like SSLT, LT, COALINDIA,
SRTRANSFIN, JUBLFOOD, UBL and ASIANPAINT.
ACC and CAIRN.
Derivative Strategy
Scrip : ITC
CMP : RsRs350.30
View: Mildly Bearish
Buy/Sell
Lot Size : 1000
Strategy: Ratio Put Spread
Expected Payoff
Qty
Scrip
Strike
Price
Series
Option
Ty p e
Buy/Sell Rate
( Rs )
BUY
1000
ITC
350
OCT
PE
4.00
SELL
2000
ITC
340
OCT
PE
1.00
LBEP
-Rs348/-
UBEP - Rs332/Max. Risk: Unlimited
If ITC continues to move below LBEP.
Max. Profit:
Rs8,000/-
If ITC closes at Rs340 on expiry.
NOTE: Profit can be booked before expiry if ITC moves in favorable direction and time value decays.
Ratings (Returns) :
Exercise Date (F & O) :
30th. Oct 2014
Buy (> 15%)
Reduce (-5% to -15%)
Accumulate (5% to 15%)
Sell (< -15%)
Closing P
((Rs)
Expected
Profit/Loss
328
(Rs4.00)
334
Rs2.00
340
Rs8.00
346
Rs2.00
352
(Rs2.00)
358
(Rs2.00)
Neutral (-5 to 5%)
212/4B, Ramani Srinivasan IInd street, Venkateswara Nagar, New Perungalathur, Chennai 600063. Ph: +919444119602
EQLine Research and Services Pvt Ltd
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EQLINE RESEARCH
212/4B, Ramani Srinivasan IInd street, Venkateswara Nagar, New Perungalathur, Chennai 600063. Ph: +919444119602