Saturday, April 10, 2010

Market Analysis & Trading Call Updates - 9/4/2010

Nifty spot closed at 5361 as against the future price closing at  5367.

Implications: Nifty trading at premium, increase in open interest, more put acitivity with call shedding and FIIs building fresh long positions combined together implies upside seen in the market till 5,400

Option Analysis
·         Call Writing: Unwinding of open interest at 5,300 and 5,400 implies short positions winding up at higher levels, major shedding was observed at 5,300 of 15 lac shares. We continue to believe 5,400 to act as a major resistance for April series on back of concentration and weak PCR.
·         Put Writing: Market may continue its upward trend till 5,400 on account of decent activity at higher strike prices Major put writing activity was witnessed in 5,300 to the extent of 17.5 lac shares. We continue to maintain our view on markets that 5,200 to act as strong resistance April series and 5,300 for intermediate time.
Implications: Positive basis on back of strong put writing with call shedding at 5,300 and 5,400 strike prices. We believe on Monday market may open gap up but it may invite some selling pressure at higher levels and April Series to settle between 5,200 and 5,400.

FIIs and DIIs activity in capital market segment
·         FIIs were net buyers of Rs 233 crore with Gross buyers of Rs 2,629 crore and Gross Sellers of Rs 2,396 crore.
·         DIIs were net sellers of Rs 66 crore with Gross buyers of Rs 1,285 crore and Gross sellers of Rs 1,351 crore.

India VIX
·         Volatility for 9TH April, 2010 close at 18.5 which is 7% lower than previous close, after touching an intraday high of 18.8 and low of 18.
Implications: Volatility after spiking to 19 odd levels yesterday has cooled off for today’s session.But we still maintain our view of  volatility  moving up to 30 levels.

 Derivative Update on FIIs
·         On Friday trading session, they were net buyers of Rs 1,209 crore. Out of Rs 1,209 crore, they were sellers of Rs 362.7 crore in Index Futures, Rs 950.4 crore In Index Options and Rs 7 crore in Stock options. However, they were net sellers Rs 110 in Stock Futures.
·         On  Friday trading session, they were net buyers of Rs 363 crore in index future vis-à-vis open interest increased by 1.6% to 2.5 crore shares, which implies that “ Fresh Build of Long positions”. 
Trading Calls - Update
·         IFCI – Long @ 53.2 for a target of 54
1.       Target hit with a day high of 54
·         Infosys – Long @ 2657 for a target of 2680
1.       Target hit with a day high of 2697
·         M&M – Long @ 525 for a target of 535
1.       Target just missed with a day high of 532.5

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Thanks,

Dewang K Mehta

www.denip.in

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