Technical Picks | March 7, 2015

RBI surprised again; but bulls seemed skeptical

Sensex (29449) / Nifty (8938)
Trading for the week started on a cheerful note on Monday in
continuation with the previous week's optimism. After filling up
the intraday gap in the first half of the session, the Nifty regained
its strength and eventually managed to close above the 8950
mark. This up move was continued on Tuesday as well and in
the process, the Nifty posted a new high, tad above the 9000
mark. On Wednesday, we witnessed a gap up opening of more
than a percent after the Reserve Bank of India (RBI) Governor,
Mr.Rajan, announced yet another surprising 25bp cut in interest
rate. However, we witnessed a sharp decline in the market post
the midsession, which pulled the Nifty down towards 8900
8900.
The concluding session on Thursday traded with higher volatility
and eventually the Nifty managed to close beyond the 8900
mark. The Healthcare and FMCG sectors managed to close
well inside the positive territory; whereas the Metal, Oil & Gas,
Banking and Auto stocks remained under pressure throughout
the week. The Nifty ended the concluded week with a nominal
gain of 0.40% over the previous week's closing.

Exhibit 1: Nifty Weekly chart

Source: Falcon

Exhibit 2: Nifty Daily chart

Pattern formation:

The '89-day EMA' and the '89-week EMA' are placed at

28156 / 8494 and 24578 / 7373 levels, respectively.

The '20-day EMA' and the '20-week EMA' are placed at

29097 / 8819 and 28229 / 8509 levels, respectively.

Future outlook
The Nifty has now reached yet another milestone by posting a
new all time high beyond the 9000 mark. In fact, yet another
surprising move by the RBI Governor made it quite easy for the
9100. In our previous report, we had clearly
Nifty to even test 9100
mentioned about Nifty reaching 9050 - 9150 levels. However,
it came quite early than we had anticipated. On Wednesday,
we witnessed a complete nosedive post the midsession after
the Nifty having posted a high of 9119.20
9119.20. This clearly indicates
that traders became skeptical despite this positive development

For Private Circulation Only |

Source: Falcon

and chose to take some money off the table. However, this was
very much in-line with our last week's report as we had expected
the Nifty to face resistance around 9050 - 9150 which coincides
with the higher end of the 'Megaphone' pattern on the weekly
chart as well as the 100% 'Price Extension' of the previous up
8470.50 to 8913.45
move (8470.50
8913.45) from the recent low of 8669.45
8669.45.
Considering current price action and a formation of a 'Doji'
pattern, we would continue to advise traders not to trade
aggressively in the market and try to take profits. On the lower
side, 8850 on the Nifty has now become a crucial support for
the bulls. A violation of this support may result in some
immediate correction towards 8720 - 8670 levels on the Nifty.

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Technical Picks | March 7, 2015

Weekly Pivot Levels For Nifty 50 Stocks

SCRIPS

S2

S1

PIV
OT
PIVO

R1

R2

SENSEX

28,683

29,066

29,545

29,928

30,408

8,699

8,818

8,969

9,088

9,239

18,753

19,251

19,896

20,394

21,039
1,816

NIFTY
BANKNIFTY

1,616

1,658

1,716

1,757

AMBUJACEM

259

266

276

284

294

ASIANPAINT

787

811

829

853

872

ACC

AXISBANK
BAJAJ-AUTO

574

595

625

647

676

1,971

2,045

2,127

2,201

2,283

BANKBARODA

167

176

187

196

207

BHEL

256

263

271

278

286

BPCL

743

760

775

791

806

BHARTIARTL

332

340

352

359

371

CAIRN

220

230

245

254

269

CIPLA

657

698

723

764

789

COALINDIA

349

357

369

377

389

DLF

145

150

155

159

165

3,268

3,355

3,419

3,506

3,570

388

395

405

413

423

GRASIM

3,589

3,687

3,856

3,954

4,123

HCLTECH

1,952

2,008

2,042

2,098

2,132

HDFCBANK

1,036

1,060

1,085

1,110

1,134

HDFC

1,289

1,342

1,372

1,425

1,455

HEROMOTOCO

2,512

2,561

2,633

2,682

2,754

HINDALCO

139

143

152

156

165

HINDUNILVR

890

915

931

955

971

DRREDDY
GAIL

ICICIBANK

328

338

350

360

372

IDFC

165

172

180

187

195

INDUSINDBK
INFY

854

883

923

953

992

2,184

2,216

2,265

2,297

2,346

ITC

329

338

348

357

367

JINDALSTEL

171

178

190

197

209

KOTAKBANK

1,364

1,388

1,423

1,447

1,482

LT

1,722

1,774

1,834

1,886

1,946

LUPIN

1,708

1,773

1,808

1,873

1,909

M&M

1,142

1,186

1,247

1,290

1,352

MARUTI

3,543

3,611

3,700

3,768

3,858

NMDC

118

123

132

136

146

NTPC

153

156

158

160

163

ONGC

310

315

322

327

335

POWERGRID

148

152

155

159

163

PNB

151

157

168

175

186

RELIANCE

829

857

883

911

937

SSLT

198

204

215

221

231

SBIN

274

284

300

309

325

861

950

998

1,087

1,135

2,561

2,629

2,720

2,788

2,880

547

559

580

592

613

81

83

86

88

90

330

337

348

355

366

TECHM

2,780

2,829

2,884

2,933

2,988

ULTRACEMCO

2,991

3,090

3,244

3,343

3,497

WIPRO

643

656

666

679

689

ZEEL

327

335

342

350

358

SUNPHARMA
TCS
TATAMOTORS
TATAPOWER
TATASTEEL

Technical Research Team

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Derivatives Review | March 7, 2015

Don't short markets as of now

Nifty spot closed at 8937.75 this week against a close of 8901.85 last week. The Put-Call Ratio has increased from 0.86 to 0.98 levels
and the annualized Cost of Carry is positive at 9.92%
9.92%. The Open Interest of Nifty Futures increased by 3.09%
3.09%.

Put-Call Ratio Analysis

Implied Volatility Analysis

PCR-OI has increased from 0.86 to 0.98 levels mainly due to

Implied Volatility (IV) for NIFTY has decreased from 16.75%.to

open interest addition in put options. Huge buildup was visible

13.47%. Historical volatility (HV) of NIFTY is at 17.55% and

in 8700-9000 put options last week which may be long positions

that for BANKNIFTY is trading at 30.16%. Liquid counters having

in the hopes market to correct further. On the other hand in

very high HV are UNITECH, JINDALSTEL, HDIL, INDIACEM and

call options 9100-9300 strike price added decent buildup.

GMRINFRA. Stocks where HV are on lower side are INFY,

Maximum buildup in current series is seen in 9000 call & 8500

POWERGRID, WIPRO, L&TFH and HDFCBANK.

put options.

Open Interest Analysis

Cost-of-Carry Analysis

Total open interest of market has increased from

Nifty current month futures closed at a premium of 51.00 points

`1,95,808/- cr. to `2,21,055/- cr. Stock futures open interest

against the premium of 62.80 points to its spot. Next month

has increased from `70,251/- cr. to `73,755/- cr. Liquid

future is trading with premium of 119.00 points. Liquid counters

counters names which added significant positions last week

where CoC is high are HDFCBANK, STAR, JPASSOCIAT,

are ITC, NMDC, ACC, JINDALSTEL and CAIRN. On the other

JISLJALEQS and IDFC. Stocks with negative CoC are NTPC,

hand unwinding was visible in counters like LT, ASIANPAINT,

SAIL, BHEL, ENGINERSIN and ACC.

HDFC, WIPRO and MARUTI.

Derivative Strategy
Scrip : HEROMO
TOCO
HEROMOT

CMP : ``2626.20
2626.20

View: Mildly Bullish

Lot Size : 125

Strategy: Long Call Ladder

Buy/Sell

Qty

Scrip

Strike
Price

Series

Option
Type

Buy/Sell Rate
(`)

BUY

125

HEROMOTOCO

2650

MAR

CE

40.00

SELL

125

HEROMOTOCO

2700

MAR

CE

25.00

SELL

125

HEROMOTOCO

2750

MAR

CE

15.00

BEP

- `2,800/-

Max. Risk: Unlimited

If HEROMOTOCO continues to move above BEP.

Max. PProfit:
rofit: `6,250/If HEROMOTOCO closes on or between
`2700 & `2750 levels on expiry.

NO
TE
NOTE
TE:: Profit can be booked before expiry if HEROMOTOCO moves in favorable direction and time value decays.

For Private Circulation Only |

Exercise Date (F & O) :

26th. Mar 2015
Expected Payoff
Closing PPrice
rice
((`
`)

Expected
oss
rofit/Loss
Profit/L

2590

0.00

2645

0.00

2700

`50.00

2755

`45.00

2810

(`10.00)

2865

(`65.00)

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Weekly
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