Wednesday, May 12, 2010

Market Analysis - 12/5/2010

Increase of discount in Nifty future to spot, higher call activity at 5,200 would invite  some more weakness but taking strong support at 5,100 and 5,000 for May series. Strategy in the Nifty would  to initiate “BUY” at when nifty is closer to 5,100.
Option Analysis
·         Call Writing: In today’s trading session, shedding in open interest was observed at 5,300 strike price of 1.89 lakh shares with fresh writing at 5,200 strike price of 3.69 lakh shares. Major writing at 5,200 strike price is being witnessed from past few trading session indicating difficulty for markets to cross these levels. Major concentration is still observed at 5,300.
·         Put Writing: Fresh addition of open interest was witnessed at 5,300 strike price and below. We believe 5,000 to act as a major support for May series on account of major writing of 13.78 lakh shares today and concentration of 84.17 lakh shares.
Implications: Strong put writing at lower levels and call writing at majorly 5,200 strike price indicates markets to take its first intermediate support at 5,100 and thereafter 5,000. On the other hand, bounce back from support may take Nifty to 5,200 and 5,300 for May series.
FIIs and DIIs activity in capital market segment
·         FIIs were net sellers of Rs 297 crore with Gross buyers of Rs 2,068 crore and Gross Sellers of Rs 2,365 crore.
·         DIIs were net buyers of Rs 180 crore with Gross buyers of Rs 1,191 crore and Gross sellers of Rs 1,010 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
·         Volatility for 12th May, 2010 close at 25.8 which is almost same as compared to previous close, after touching an intraday high of 25 and low of 24.35.
Implications: After smart recovery seen in VIX yesterday, it remained flat for today’s trading session. We continue to maintain our Bullish view on VIX.

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