CNX Weekly Techno-Derivatives Snapshot

CNX Nifty (CMP 7790):

Index has closed at an record high levels with an improvement in Macro-Economic Numbers with Inflation cooling off to multi-month lows & IIP data showing a tremendous improvement, significant revival in Monsoon, crude settling down around 107 $ per barrel & acceleration in FII Flows have led the Index to closed approximately 3% positive.

With 7700-7800 CE having OI build-up of 53-55 Lakhs each along with 8000 CE having OI of 77 lakhs & along with 7700-7600 Put having an OI of 64 lakhs & 46 lakhs respectively, 7680-7710 is a key support for the next few sessions & 7830-7840 is key resistance going forward.

Expect Nifty to find support around 7680-7720 & till this support zone holds, can further move upto 7860-7890. However, a lot of resistance would be witnessed at higher levels going forward with the stock-specific cracks to the tune of 15-20% witnessed in the past 2 sessions despite index closing at an all-time record high.

Above 7840, the move could gather further momentum upto 7910-7960.

If Index breaks & sustains below 7680, would lead a retest of support zone around 7530-7465 zone. 

Weekly Range could be 7685-7850.  

Technically, Key Oscillators RSI & MACD are placed above their respective averages on the Daily as well as on Weekly charts. However Stochastics has turned into sell mode on daily charts from overbought zone which indicates range bound trading in the coming week & an increase in volatility ahead of truncated expiry week.  

On the Derivatives Front,

W-o-W Nifty saw long build up to the tune of 12% in OI, with price moving up by nearly 2%, with maximum 7800-7900-8000 CE with total 54-77 lakhs each  & 7700 PE with total 64.3 lakhs (with 7650 PE adding 10.50 lakh shares on Friday).

BANKNIFTY saw 4% reduction in OI with price ending flat to slightly negative; CNXIT saw 16% OI reduction with price moving up by nearly 4% W-o-W basis.

BANKNIFTY (CMP 15322):

Last week, Bankex has traded in a tight range & closed mildly positive on a weekly basis as it underperformed broader indices on account of few results which were below expectations. 

Hence Going Forward, till 15,050 zone holds, expect the index to witness further upside upto 15,850 zone.

However, if it breaks & sustains below 15,050 zone, 14,660-14,500 would be retested.  

Going forward,

Movement of the Markets would be dictated by FII Fund Flows, Global Market Trends, ongoing India Q1FY15 Corporate results along with future earnings guidance, progress of Monsoon which has improved significantly, movement of Rupee against the Dollar & crude oil price movement.

USDINR (CMP 60.04):

USDINR has consolidated & traded in a 1.5% band between 59.40 & 60.60 for the last 20 sessions. Now Going Forward, Till Rupee holds 59.25 zone, would once again move upto 61.5-61.80 zone.

BRENT CRUDE ($ 108.4)

As the news-flow pertaining to Iraqi crisis have somewhat reduced, Crude Prices have settled & consolidated at higher levels around 107-108$ after hitting a 9-10 month high of 113-114$ couple of weeks back.

Till 111$ is not crossed, expect support levels of 104-103$ to be retested.

Midcap: (CMP 10788)

Post past few months of sharp upmove, index is taking a breather & consolidation is witnessed with a negative bias.

NSE Mid-cap CMP 10,788 would witness resistance at higher levels around 11000 zone. 

Till 11,000 is not crossed, expect the index to retest support zone of 10400-10450.

On a cross-over above 11,000 Index would once again resume its upmove towards 11,400-11,600.

One can look to buy quality midcaps on any sharp declines from a medium term perspective.

Small Cap (CMP 10037):

Post past few months of sharp upmove, index is taking a breather & consolidation is witnessed with a negative bias.

NSE Mid-cap CMP 10,037 would witness resistance at higher levels around 10300 zone. 

Till 10,300 is not crossed, expect the index to retest support zone of 9700-9650.

On a cross-over above 10,300 Index would once again resume its upmove towards 10,700-10,800.

VIX (14.22):

VIX has been steadily trading in a range between 11 to 17 in the previous 3-4 weeks.

Above 17, it would directly spike upto 22-24 zone.

• FII’s for the past week have stayed net buyers in the cash market as well as in derivatives markets while DII’s have been Net sellers for the week gone by. 

• On a Weekly basis In Index Futures FIIs were Net Buyers to the tune of ` 1434 Cr with an open interest increase of around `2424 Cr which indicates Long Build Up in Index Futures by FIIs.

• Nifty PCR_OI has risen to 0.94 compared to 0.82 week earlier.

• NIFTY 7700-7600 PE highest OI 64-46 lakh shares, implying 7680-7710, strong support; On other hand 7700-7800 CE total OI 53 & 55 lakh shares; expected range coming week 7685-7850.

• Nifty Futures have closed at a 5 points discount compared to 5 points premium a week earlier.

Cumulative FII Derivatives Stats from 27/06/2014 to 25/07/2014:

Index Futures: -746 Cr;

Index Options: +4716 Cr;

Stock Futures: +4500 Cr;

Stock Options: -266 Cr

Cash Market:

FII: +12870 Cr;

DII: -1946 Cr.

Cumulative FII Derivatives Stats from 21/07/2014 to 25/07/2014:

Index Futures: +1434 Cr;

Index Options: -462 Cr;

Stock Futures: +1999 Cr;

Stock Options: -364 Cr

Cash Market:

FII: +1633 Cr;

DII: -914 Cr.

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