Nifty is trading at premium to September series along with dividend of 5 points. Major put writing at 5,400 for last few trading sessions thus to act as major support for intermediate term and major call writing at higher levels with concentration at 5,600 to act as a resistance. Thus we expect markets to trade in a range.
Option Analysis:
· Call writing: In September series, writing was seen at higher strikes. Maximum writing was witnessed at 5,700 CE and 5,600 CE of 8.66 lakh shares and 8.11 lakh shares in today’s trading session. Concentration is observed at 5,600 CE of 77.76 lakh shares.
· Put Writing: Whereas in puts, maximum writing was witnessed between 5,400 and 5,100 with maximum at 5,400 strike 6.22 lakh shares. Concentration is observed at 5,400 PE of 95.82 lakh shares.
Implications: Major call writing at higher strike with put writing at lower strikes indicates that markets to trade in a range where the upside is limited to 5,500 for intermediate term and above that 5,600. However, on the downside 5,400 is acting as a strong support for near term and 5,300 in worst case scenario.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 184 crore with Gross buyers of Rs 1,418 crore and Gross Sellers of Rs 1,234 crore.
· DIIs were net buyers of Rs 68.7 crore with Gross buyers of Rs 916 crore and Gross sellers of Rs 848 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 31st August, 2010 close at 18.36 which is 6.47% lower as compared to previous close, after touching an intraday high of 19.63 and low of 16.60.
Implications: Indian VIX plunged by ~6.5% in today’s trading session. We expect it to move upwards and are Bullish on the same which would have negative impact on Nifty.
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