Nifty spot closed at 5273 against the Nifty futures closing at 5275
Implications: Decrease in premium and consecutive third strong trading session for call option confirms our negative view on the market. The intermediate trend suggests the market to trade in a range of 5,200 to 5,400 with more downward bias.
Option Analysis
· Call Writing: Fresh writing and concentration level indicates 5,300 to act as an intermediate resistance and 5,400 for April series. In today’s trading session, 13 lacs open position was added at 5,300 strike price. Concentration indicates 5,400 to act as a major resistance for April Series.
· Put Writing: Consecutive third trading sessions of unwinding of positions at higher levels implies further downside is expected. Major shedding was seen at 5,300 and 5,400 strike prices. We continue to maintain our view on markets that 5,200 to act as strong resistance April series due to concentration.
Implications: Consecutive third trading session for higher activity in call than put would lead fresh selling in next few trading sessions. However, we expect downside to hault at 5,200 on back of concentration of put.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 99 crore with Gross buyers of Rs 3,928 crore and Gross Sellers of Rs 3,828 crore.
· DIIs were net sellers of Rs 77 crore with Gross buyers of Rs 1,222 crore and Gross sellers of Rs 1,298 crore.
India VIX
· Volatility for 15th April, 2010 close at 21.5 which is 7% increase as compared to previous close, after touching an intraday high of 21.65 and low of 18.65.
Implications: As expected volatility has started its uptrend. We expect Volatility to increase from current level to 30 odd levels and there being an inverse relationship between nifty and volatility, we expect nifty to start its downward move.
Thanks,
Dewang K. Mehta
DENIP Consultants - www.denip.in
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