Nifty (January) futures’ premium declined from 9 to 3 points and there was no significant change in open interest. Nifty decline by 2.5% and premium decrease with no change in open interest implies change in hands from “Long to Short”. Consecutive sixth trading sessions in a row, where more activity was observed in Call options at higher strike price. However, in today trading sessions, for a change, we have observed more put writing at lower levels (largely 5,600 and 5,700) which implies market bottoming out and taking strong support at these levels. The strategy to be adopted by traders should be to initiate fresh buy at current levels and to book profit at 6,000.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 10th January, 2011 close at 23.2 which is 11.2% higher as compared to previous close, after touching an intraday high of 23.2 and low of 19.6
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