Nifty futures trading at a discount to spot, higher put writing than call at 5,400 indicates markets taking strong support at current levels. So, we see markets to trade above 5,400 but below 5,500 for intermediate period. The range for August series would be 5,500 and 5,300.
Option Analysis:
· Call writing: In today’s trading session shedding was witnessed at in-the-money strikes, whereas maximum writing was seen at 5,500 and 5,400 CE of 7.23 lakh shares and 4.7 lakh shares. Concentration is observed at 5,500 CE of 76 lakh shares.
· Put Writing: On the other hand, fresh addition was seen between 5,700 PE and 5,200 PE with maximum at 5,400 PE of 10 lakh shares. Concentration is observed at 5,300 PE of 84 lakh shares
Implications: More of call writing than puts at higher level implies that market is faces resistance at higher levels and higher put concentration than calls at 5,400 level indicates market would take a strong support at this level for intermediate term. Thus, we expect market to trade between 5,500 and 5,300 for August series on account of concentration.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 607 crore with Gross buyers of Rs 3,047 crore and Gross Sellers of Rs 2,439 crore.
· DIIs were net sellers of Rs 152 crore with Gross buyers of Rs 948 crore and Gross sellers of Rs 1,100 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 3rd August, 2010 close at 17.55 which is 2.45% lower as compared to previous close, after touching an intraday high of 18.26 and low of 16.78.
Implications: Indian VIX plunged further in today’s trading session and is trading at its support. We expect it to move upwards and are Bullish on the same which would have negative effect on Nifty
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