Shifting of concentration in call options at 5,700 and major put writing at 5,500 indicates that the range for market has shifted higher and markets gaining strength at current levels. However, it would be difficult to sustain above 5,600 on account of less put writing than calls. Thus, we expect Nifty to take support at 5,500 for intermediate term and 5,400 for the series on account of concentration.
Option Analysis:
· Call writing: In today’s trading session, shedding was observed at in-the-money strike price. Maximum writing was witnessed at 5,700 CE of 28.8 lakh shares and shedding at 5,500 CE of 15.6 lakh shares. Concentration has shifted from 5,600 CE to 5,700 CE.
· Put Writing: On the other hand, maximum writing in put was witnessed 5,600 PE and 5,500 PE of 21.69 lakh shares and 23.87 lakh shares. Concentration is observed at 5,400 PE of 11.88 lakh shares.
Implications: Shifting of concentration in call option and continuous put writing at 5,400 indicates market gaining strength at current levels and setting for an up move. However, we see upside capped for the September expiry to 5,700 and downside to 5,400.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 946 crore with Gross buyers of Rs 2,750 crore and Gross Sellers of Rs 1,803 crore.
· DIIs were net sellers of Rs 392 crore with Gross buyers of Rs 1,816 crore and Gross sellers of Rs 1,424 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 6th September, 2010 close at 15.22 which is 4% lower as compared to previous close, after touching an intraday high of 16.11 and low of 15.09.
Implications: Indian VIX is trading at its support and we expect it to move upwards and are Bullish on the same which would have negative impact on Nifty.
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