In today trading session, we have observed short covering at lower levels which was reflected on following parameters a) discount turning into premium, b) decrease in open interest by 4.2% and c) heavy call shedding at in- the and at-the money strike prices . On the options front, we have observed huge call shedding than call at an overall level. Major call shedding was seen by seen at 5,700 of 15.8 lacs shares with marginal put shedding. Today’s move have changed the negative momentum to positive and may see short covering at every levels. However, the markets would take strong resistance at 6,000 on back of concentration for January series. So, the strategy to be adopted by traders should be to book profits at 5,900 and open short positions at 6,000 .
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 20th January, 2011 close at 21.0 which is 0.4% lower as compared to previous close, after touching an intraday high of 21.8 and low of 20.6
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