Increase of discount in Nifty future to spot, higher call activity at 5,100 and 5,000 strike prices with put shedding witnessed across all strikes would invite more weakness at current levels. However, we believe that Global Cues should soon start giving direction to the market.
Option Analysis
· Call Writing: Consecutive third trading session of major writing observed at 5,100 and 5,000 strike prices implies that it would be difficult for market to sustain above these levels. Fresh addition of ~2.5 lakh shares was witnessed at 5100CE and 5000CE strike prices. Major concentration is still observed at 5300CE of ~84 lakh shares.
· Put Writing: On the other hand, in today’s trading session shedding was seen across all strike prices except 5100PE strike price. Major unwinding of was witnessed at 4800PE and 4700PE strike prices. Concentration observed at 5000PE strike price of ~88.7 lakh shares.
Implications: Consecutive third trading session for major call writing and put shedding indicates less upside to be seen from current levels. We expect market to trade in narrow range of 5000 and 5200 for next few trading sessions and for May Series.
FIIs and DIIs activity in capital market segment
· FIIs were net sellers of Rs 440 crore with Gross buyers of Rs 2,154 crore and Gross Sellers of Rs 2,594 crore.
· DIIs were net buyers of Rs 326 crore with Gross buyers of Rs 1,387 crore and Gross sellers of Rs 1,061 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 16th May, 2010 close at 26.50 which is 2.32% lower as compared to previous close, after touching an intraday high of 27.6 and low of 26.15.
Implications: Volatility, after making a high of 29.36 in yesterday’s trading session has come down today. We expect volatility to move above 30 odd levels which would have negative impact on Nifty.
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