Implications: Higher put writing at lower levels than calls indicates strong support at lower levels especially at 5,200. However, on other hand, major call writing at higher levels indicates less upside. So, we believe markets to trade in a narrow range where the upside is capped at 5,400 and 5,200 maintaining a strong support on account of concentration for near term and 5,000 at lower end for July series. The strategy a trader can adopt is to sell 5,400 CE and 5,000 PE and hold till expiry.
Option Analysis
· Call Writing: Fresh addition of open interest at higher levels indicates upside being capped. In today trading session, major activity was observed at 5,300 strike price which added 6.65 lakh shares. Concentration observed at 5,500 of 71 lakh shares.
· Put Writing: Major activity was observed at lower strike prices with majority at 4,700 strike prices adding open interest of 5.46 lakh shares. Major concentration of open interest is observed at 5,200 strike price of 83.39 lakh shares.
Implications: Strong put writing at lower levels and call writing at higher levels indicates market to trade in a narrow range for next few trading sessions. We believe market to trade in range of 5,300 and 5,200 for intermediate term.
FIIs and DIIs activity in capital market segment
· FIIs were net sellers of Rs 160 crore with Gross buyers of Rs 1,549 crore and Gross Sellers of Rs 1,709 crore.
· DIIs were net sellers of Rs 7 crore with Gross buyers of Rs 1,153 crore and Gross sellers of Rs 1,160 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 1st July, 2010 close at 21.44 which is 6.83% lower as compared to previous close, after touching an intraday high of 22.10 and low of 20.93.
Implications: Indian VIX as expected is moving upwards from its support. We are “Bullish” on the same and expect it to move up to 30 odd levels which would have a negative impact on Nifty.
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