Range Bound View: Nifty futures trading at discount and volatility trading near to its support level indicates upside momentum limited. We expect markets to trade in the narrow range of 5,300 and 5,200 for near term and 5,300 and 4,900 for June expiry on account of concentration.
Option Analysis
· Call Writing: During the week, major writing was observed at 5,500 and 5,400 strike prices of 14.75 lakh shares and 10.76 lakh shares respectively. Concentration has shifted from 5,200 to 5,300 strike price.
· Put Writing: On the other hand, major writing was witnessed at 4,800 and 5,200 strike price of ~9 lakh shares and 6.77 lakh shares respectively, whereas major shedding of 13.91 lakh shares was observed at 5,000 strike. Concentration observed at 4,800 and 5,200 strike prices.
Implications: Call shedding at lower levels and strong put writing at lower levels indicates market limited downside but we do not expect major upside also. So expect market to trade in a narrow range of 5,300 and 5,200 for next few trading sessions and wide range of 5,300 and 4,800 for June expiry.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 779 crore with Gross buyers of Rs 2,890 crore and Gross Sellers of Rs 2,110 crore.
· DIIs were net sellers of Rs 499 crore with Gross buyers of Rs 829 crore and Gross sellers of Rs 1,329 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 18th June, 2010 close at 19.96 which is 4.27% lower as compared to previous close, after touching an intraday high of 21.36 and low of 19.41.
Implications: During the week Indian VIX plunged by ~20% and is trading at its support level. We expect volatility to move up and are “Bullish” on the same.
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