We believe markets to be in the range of 5,200 and 5,500 for July series on account of concentration but we expect markets to witness immediate support at 5,300 and resistance at 5,500 on account of strong writing witnessed at these strike prices. However, our major concern is volatility which is trading at its support.
Option Analysis
· Call Writing: In this week, maximum addition of open interest was observed at 5,500 of 18.37 lakh contracts and 12.16 lakh contracts at 5,600. Concentration of call observed at 5,500 of 93 lakh contracts.
· Put Writing: On the other hand, major addition in puts took place at 5,300 of 18.27 lakh contracts and 4,800 strike added 13.97 lakh contracts. Concentration of put observed at 5,200 of 87.56 lakh contracts.
Implications: In the week, strong call writing was observed at higher strike with majority at 5,500 and put writing at 5,300 indicating that the market range has shifted on a higher side. So, we expect 5,300 to act as support for intermediate term and 5,200 for July series whereas 5,500 to act as a resistance.
FIIs and DIIs activity in capital market segment
· FIIs were net buyers of Rs 1,104 crore with Gross buyers of Rs 3,457 crore and Gross Sellers of Rs 2,353 crore.
· DIIs were net buyers of Rs 38 crore with Gross buyers of Rs 1,458 crore and Gross sellers of Rs 1,420 crore.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 9th July, 2010 close at 20.21 which is 4.31% lower as compared to previous close, after touching an intraday high of 20.77 and low of 20.14.
Implications: Indian VIX traded in a very narrow range in yesterday’s trading session. We are “Bullish” on the same and expect it to move upwards.
Thanks,
Dewang K. Mehta
DENIP Consultants
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