Implications: Low volatility and higher call activity with put writing in deep out of money indicates some more weakness in the market from current levels. However, we expect market to take strong support at 5,200 and 5,100 odd levels for May month and 5,400 to act as resistance.
Option Analysis
· Call Writing: More of call writing was observed at higher levels. 5300CE added open interest of 11.1 lakh shares and 6.0 lakh shares at 5400CE. 46% of total call near month open interest and concentration at 5300CE indicates a resistance for May expiry.
· Put Writing: Weakness in market may continue on back of shedding at higher levels with major put writing in deep in the money. 4800 PE added open interest of 9.5 lakh shares and 4.0 lakh shares at 5000PE. 40% of total put near month open interest and concentration at 5200 indicates a support for May expiry.
Implications: We expect some more weakness in the market in next few trading sessions. So, markets would be trading between 5200 and 5300 for intermediate time and 5500 and 5000 for May expiry.
FIIs and DIIs activity in capital market segment
· FIIs were net sellers of Rs 387 crore with Gross buyers of Rs 1,553 crore and Gross Sellers of Rs 1,940 crore.
· DIIs were net buyers of Rs 107 crore with Gross buyers of Rs 829 crore and Gross sellers of Rs 936 crore.
India VIX
· Volatility for 3rd May, 2010 close at 22 which is 8.8% higher as compared to previous close, after touching an intraday high of 22.5 and low of 20.95.
Implications: Volatility has an inverse relationship with Nifty. We expect volatility to further move from current odd levels to 30 odd levels and have negative impact on Nifty.
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