Market Overview
In April series, Nifty has registered a gain of 62.1 points or 1.2% to 5,322 and 11 out of 19 trading sessions FIIs were net buyers to the tune of Rs 6,887 crore. Nifty witnessed Long roll of 25.3% with marginal rollover of 7bps. We may see some increase in volatility for next 3 trading sessions on account of lower rollover and lack of confidence among traders.
Option Analysis
• Call Writing: Major writing was seen at 5400CE and shedding at 5200CE indicates limited downside in April Series. Major concentration of open interest is still observed at 5400CE strike price of 72.5 lacs shares.
• Put Writing: Fresh addition of open interest was observed at 5300PE strike price of 4.3 lacs shares. Major concentration of open interest is still observed at 5200PE of 99.8 lacs shares.
Implications: Call shedding and Put writing at lower levels indicates limited downside. However, by observing today activity and concentration level implies April series to settle between 5,200 at lower end and 5,300 at higher end.
FIIs and DIIs activity in capital market segment
• FIIs were net buyers of Rs 234 crore with Gross buyers of Rs 2,121 crore and Gross Sellers of Rs 1,887 crore.
• DIIs were net sellers of Rs 73 crore with Gross buyers of Rs 821 crore and Gross sellers of Rs 895 crore.
India VIX
• Volatility for 26th April, 2010 close at 19.8 which is 2% lower as compared to previous close, after touching an intraday high of 20.85 and low of 18.85.
Implications: Volatility did not make any significant moves and is trading at current levels from past few days. We hold our positive view on Volatility and there is an inverse relationship between VIX and Nifty.
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