Thursday, July 15, 2010

Markets Today - 15/7/2010 - Disclaimer Post Applies

Nifty futures trading at a premium to spot, maximum put concentration witnessed at 5,300 strike price signifies support and on the upper side 5,400 to act as a resistance level on account of more call concentration than puts. Thus the markets would trade in a narrow range for 5,400 and 5,300 for intermediate term and the range for expiry would be 5,500 and 5,200.

Option Analysis
·         Call Writing: Shedding in open interest was witnessed across strike prices except at 5,600 and 5,400 strike prices where marginal fresh writing was seen. ~48% of the total outstanding open interest in calls is observed at 5,500 and 5,400 strikes which makes them significant resistance level.
·         Put Writing: On the other hand, fresh writing to the tune of 10.26 lakh contracts was observed at 5,100 strike price. ~43% of the total outstanding open interest in puts is observed between 5,300 and 5,100 strike prices thus would act as strong support levels.
Implications: Shedding in calls across strike prices with fresh writing in puts observed at 5,100 indicates that lower levels acting as significant support levels. On account of concentration we see 5,300 acting as a good support for intermediate term and 5,200 for July expiry whereas the upside is capped at 5,400.
FIIs and DIIs activity in capital market segment
·         FIIs were net buyers of Rs 365 crore with Gross buyers of Rs 2,590 crore and Gross Sellers of Rs 2,225 crore.
·         DIIs were net sellers of Rs 588 crore with Gross buyers of Rs 884 crore and Gross sellers of Rs 1,472 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
·         Volatility for 15th July, 2010 close at 20.18 which is almost flat as compared to previous close, after touching an intraday high of 20.50 and low of 19.12.
Implications: Indian VIX is trading near its support and gave a closing at its high in today’s trading session. We are “Bullish” on the same and expect it to move upwards.

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