Nifty future trading at a premium from discount, higher put writing than call at higher levels indicates markets gaining strength along with FIIs building fresh positions. However with larger put concentration at lower levels major downside would be restricted.
Option Analysis:
· Call writing: In today’s trading session, call shedding was witnessed at in-the-money and at-the-money strikes and writing at higher strikes. Major shedding was seen between 5,800 CE and 5,600 CE of total 53.8 lakh shares and writing at 6,000 CE of 6.5 lakh shares. Concentration is observed at 5,700 CE of 73 lakh shares.
· Put Writing: On the other hand, major writing was observed at 5,800 PE for second consecutive trading session of 10.66 lakh shares. Concentration is observed at 5,400 PE of 122 lakh shares.
Implications: Positive basis on back of strong put writing with call shedding at 5,800 strike price. However we believe markets may invite some selling pressure at higher levels and September Series to settle between 5,700 and 5,500.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 1,651 crore with Gross buyers of Rs 4,102 crore and Gross Sellers of Rs 2,450 crore.
· DIIs were net sellers of Rs 1,124 crore with Gross buyers of Rs 1,233 crore and Gross sellers of Rs 2,358 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 14th September, 2010 close at 18.60 which is 2.5% higher as compared to previous close, after touching an intraday high of 20.63 and low of 16.88.
Implications: Indian VIX as expected is moving upwards. We expect it to move upwards and are Bullish on the same which would have negative impact on Nifty.
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