Nifty future is trading at a premium of ~24 points to October future. Major call writing and concentration at 6,200 CE indicates this as to act as a stiff resistance whereas on the downside 6,000 to act as a good support on account of put concentration.
Option Analysis:
· Call writing: During the week, addition was witnessed between 6,300 CE and 6,000 CE where the total outstanding open interest added is 40 lakh shares with maximum addition seen at 6,000 CE of 19.6 lakh shares. Shedding was seen at in-the-money strikes and deep out-of-the-money strikes. Concentration was seen at 6,200 CE of 79 lakh shares.
· Put Writing: On the other hand, major writing was seen at 5,900 PE of 5.26 lakh shares whereas maximum shedding was witnessed between 6,300 PE and 6,200 PE where the total open interest shed is 25.6 lakh shares. Concentration is being observed at 6,000 PE of 77.7 lakh shares.
Implications: Major call writing and concentration at 6,200 call and put concentration at 6,000 strike indicates Nifty to trade in this range for October expiry.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 584 crore with Gross buyers of Rs 3,166 crore and Gross Sellers of Rs 2,582 crore.
· DIIs were net sellers of Rs 327 crore with Gross buyers of Rs 1,388 crore and Gross sellers of Rs 1,715 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 22nd October, 2010 close at 21.6 which is 2.6% lower as compared to previous close, after touching an intraday high of 22.4 and low of 20.4.
Implications: Indian VIX plunged for consecutive second trading session and thereby was down 3.3% for the week. We expect it to move upwards and we are Bullish on the same which would have negative impact on Nifty.
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