Nifty Derivative Snapshot & Derivative Stock Recommendations

CNX NIFTY strived hard to head above the water, but twice reversed down amidst selling pressure in major frontline counters and after registering a high of 8,628 and low of 8,536 levels finally, finished trade with the loss of 8 points at 8,543 mark.

• NSE Cash segment witnessed a turnover of about Rs15,796 crores as compared to Rs13,648 crores earlier.
• Overall market breadth remained negative, where 556 stocks advanced against 931 declined stocks.
• Mixed trend was witnessed amongst sectoral indices during the day, where CNX PHARMA emerged as top gainer with the increase of 1.8%, however, CNX AUTO & CNX PSU BANK emerged as top losers with the decrease of 1.4% each.
• Nifty lost 7 points to close at 8542.
• OI concentration is seen at 8500 PE and 9000 CE.
• Reduction witnessed in 8600CE and addition in 8500PE.
• PCR OI stands at 0.92 compared to 0.84 in the previous trading session.
• Nifty to trade with a resistance of 8730.

CNX NIFTY OUTLOOK

CNX NIFTY closed in the loss for straight fifth trading session in a row, where volatility was relatively higher during the day. 

Though, index lost 214 points post our short recommendation (recommended on 10th March, 2015 at 8,757 level), our near-term technical view remains negative with probable down move towards 8,400 mark, however partial profit booking advised at current juncture, as high volatile action cannot be ruled out in next couple of days due to F&O expiry. 

As mentioned earlier, in case of major rebound, hurdle from 20-days EMA (i.e. placed around 8,700 mark) will restrict the rise.

As for the day, support is placed at 8,510 and then at 8,470 levels, while resistance observed at 8,630 and then at 8,700 levels.

Put Call Ratio based on Open Interest of Nifty moved up from 0.85 to 0.89 levels. Historical Volatility of Nifty fell down from 17.29 to 16.78 levels and Implied Volatility also fell down from 14.37 to 13.55 levels. 

Stocks

• TATAMotors, IT stocks and Hindunilvr kept Nifty in the red.
• Pharma stocks have done well. DrReddy which had been trading sideways had a resistance of 3480. The stock has broken the resistance and closed above the same. This has opened up significant space on the upside. The volumes in the previous trading session was the highest in the recent times. One can trade the same at current levels for a near term target of 3575 and higher.
• Market wide open interest is seen at Rs.254,665cr
• Jubilant Food and TVS Motors observed build up in short position.
• Amongst sectoral index, CNX PSU Bank adds fresh short position.

COALINDIA has been consolidating from last couple of trading session and also making an attractive price pattern with shifting support on higher side. It is also making an attractive price pattern with short covering activity. 

One can buy the stock with stop loss of 323 for the upside target of 345 levels. 

Buy Between Rs.364 to 368,Stop Loss 360,Target 378

JSWSTEEL has been forming lower highs- lows from last five series and also witnessing built up of short position with sustained selling pressure at every small bounce back move. It has given the lowest closing in last one year and holding below 900 may continue weakness towards 885 and 860 levels. 

It was under the selling pressure even when index was trading at lifetime high territory and is continuously trading in the bears grip. 

One can sell the stock with a stop loss of 940 levels for the downside immediate target of 885 levels.

Sell Between Rs. 917 to 926,Stop Loss 940,Target 885