Negative observations: Nifty futures trading at discount from premium, volatility trading near to its support level, no major put writing above 5,200 and major call concentration still observed at 5,200. Positive Observation: Major put writing at 5,200 for last few trading sessions and 5,100 to act as major support for intermediate term. Options Strategy: Sell July 5,000 PE and 5,300 CE and hold till expiry.
Option Analysis
· Call Writing: Shedding at lower levels with major writing at 5,200 indicates markets are facing resistance at this level. Major writing was witnessed at 5,200 strike price to the tune of 7.87 lakh shares. Concentration observed at 5,200 of 79.75 lakh shares.
· Put Writing: On the other hand, major writing was witnessed at 5,200 strike price of 12.68 lakh shares. Concentration observed at 4,800 of 90.91 lakh shares.
Implications: Call concentration and major put writing continuously witnessed at 5,200 strike price indicates this would be a crucial level for the markets which is acting as a resistance as well as support. However, we expect the market to trade in the range of 5,200 and 4,800 for June series on account of concentration.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 783 crore with Gross buyers of Rs 2,531 crore and Gross Sellers of Rs 1,747 crore.
· DIIs were net sellers of Rs 170 crore with Gross buyers of Rs 1,076 crore and Gross sellers of Rs 1,247 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 16th June, 2010 close at 22.67 which is 3.14% higher as compared to previous close, after touching an intraday high of 22.91 and low of 20.72.
Implications: Volatility plunged till its support level in today’s trading session and then started its upward move. We now change our view and are “Bullish” on volatility.
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