Tuesday, May 4, 2010

Markets Today - 4th May 2010 - Analyzed !

Futures trading at discount, volatility start rising as expected and consecutive third strong strading session for call indicate some more trading sessions for negative trend. However, We expect 5,100 to act as support for intermediate and 5,000 for May expiry. On the other hand, 5,300 to act as a  resistance for near term and 5,400 for May expiry.

Option Analysis
·         Call Writing: Higher activity was observed in and at the money strike prices. Maximum addition of open interest was witnessed at 5,200 of 14.6 lakh shares. ~44% of total open interest at 5,300 & 5,400 with concentration at 5,300 indicates limited upside from current levels.
·         Put Writing: Weak activity witnessed at higher levels. Higher fresh writing of more than 3 lakh shares was observed below 5,100 strike prices. ~37% of total open interest at 5,200 & 5,100 with concentration at 5,200 indicates some bounce back may be seen when Nifty is closer to 5,100
Implications: Consecutive third trading session for higher call writing than put writing indicates some more weakness in next few trading sessions. However, by observing concentration in put it seems that market to take intermediate support at 5,100 and 5,000 for May expiry.  

 FIIs and DIIs activity in capital market segment
·         FIIs were net sellers of Rs 29 crore with Gross buyers of Rs 2,753 crore and Gross Sellers of Rs 2,783 crore.
·         DIIs were net sellers of Rs 438 crore with Gross buyers of Rs 858 crore and Gross sellers of Rs 1,296 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)
·         Volatility for 4th May, 2010 close at 23.3 which is 5.2% higher as compared to previous close, after touching an intraday high of 23.35 and low of 21.35.
Implications: As expected volatility has started its uptrend. We are “Bullish” on Volatility and expected it to increase 30 odd levels 

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