Nifty trading at a premium to spot. Major put writing at 5,400 for consecutive second trading session along with put concentration thus to act as strong support and below that 5,300 in worst case scenario. The upside is restricted at 5,600 on account of major call concentration. Thus, we see the markets to trade in the range of 5,600 on the upside and 5,400 on the downside for September series.
Option Analysis:
· Call writing: In September series, fresh writing was seen at higher levels with maximum writing at 5,500 CE of 7 lakh share. Addition of 5.99 lakh and 5.54 lakh shares was seen at 5,600 and 5,700. Concentration is observed at 5,600 CE of 90 lakh shares.
· Put Writing: On the other hand, major writing was witnessed at 5,500 PE and 5,400 PE of 5.41 lakh shares and 6.91 lakh shares for second consecutive day. Concentration is observed at 5,400 PE of 11.20 lakh shares.
Implications: On account of more call concentration than put, 5,500 level would act as a strong resistance and above that 5,600 whereas on the downside 5,400 level to act as a big support on account of major put writing and put concentration. We believe markets to trade in a range of 5,600 and 5,400 for September series.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 82 crore with Gross buyers of Rs 2,036 crore and Gross Sellers of Rs 1,954 crore.
· DIIs were net sellers of Rs 118 crore with Gross buyers of Rs 1,056 crore and Gross sellers of Rs 1,175 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 2nd September, 2010 close at 16.15 which is 3.29% lower as compared to previous close, after touching an intraday high of 16.7 and low of 15.13.
Implications: Indian VIX plunged for second consecutive day. We expect it to move upwards and are Bullish on the same which would have negative impact on Nifty.
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