Tuesday, June 1, 2010

Markets Today - 31/5/2010 - Disclaimer Post Applies

Implications: Nifty trading at huge discount (not a bearish signal) because of dividend payout in a lot of companies. Higher call activity above 5,200 strike prices along with major put writing at and below 5,000 levels indicates markets to be range bound. However, we see the markets to trade in the range of 5,200 and 5,000.

Option Analysis
·         Call Writing: Fresh writing of call was witnessed at higher strike prices. 5,400 strike price added 3.73 lakh shares whereas ~4.5 lakh shares were added at 5,300 and 5,200 strike prices. Major concentration is still observed at 5,100 of ~54 lakh shares. 
·         Put Writing: On the other hand, in today’s trading session fresh writing witnessed between 4,800 and 5,100 strike prices when combined open interest build up is ~24.59 lakh shares with maximum at 5,000 strike price. Concentration is observed at 4,800 strike price of ~57 lakh shares.
 Implications: Heavy call writing at higher levels indicates less upside to be seen from current levels. Whereas, fresh put writing at lower levels with majority at 5,000 levels indicates strong support at lower levels. So we expect the market to trade in a narrow range of 5,200 and 5,000 for few trading sessions.
FIIs and DIIs activity in capital market segment
·         FIIs were net buyers of Rs 586 crore with Gross buyers of Rs 2,301 crore and Gross Sellers of Rs 1,714 crore.
·         DIIs were net sellers of Rs 73 crore with Gross buyers of Rs 902 crore and Gross sellers of Rs 976 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
·         Volatility for 31st May, 2010 close at 26.64 which is 8.89% lower as compared to previous close, after touching an intraday high of 28.59 and low of 26.43.
Implications: Volatility maintained yesterday level and did not change much for today’s session. 

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