Markets Today - 09/10/2010 - Disclaimer Post Applies

Nifty future is trading at a huge premium to October future. On account of call shedding at in-the-money strikes and writing at higher strikes indicates Nifty facing stiff resistance at higher level especially at 6,200 on account of more call concentration than put. However put concentration and writing at 6,000 indicates that it would act as a major support for October series. Thus we expect Nifty to trade in the range of 6,200 and 6,000 for intermediate term.

Option Analysis:

·         Call writing: During the week, shedding was witnessed at in-the-money strike prices and major writing at out-of-the-money strike price. Major call shedding was witnessed at 5,900 CE of 2.94 lakh shares whereas fresh writing was seen between 6,500 CE and 6,200 CE with majority at 6,400 CE which added 17 lakh shares. Concentration is being observed at 6,200 CE of 55.97 lakh shares.

·         Put Writing: On the other hand, major writing was seen at 6,100 PE of 11.44 lakh shares and 6,100 CE of 9.93 lakh shares. Concentration is being observed at 6,000 PE of 83.68 lakh shares.

Implications: Call shedding at in-the-money strikes during the week and fresh writing at higher levels indicates Nifty facing stiff resistance at higher levels. However, put concentration and writing at 6,000 level indicates this as to act as a major support for October series. However, on the upside Nifty will face resistance at 6,200 on account of more of call concentration than puts.

FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 586 crore with Gross buyers of Rs 3,490 crore and Gross Sellers of Rs 2,903 crore.

·         DIIs were net sellers of Rs 1,002 crore with Gross buyers of Rs 923 crore and Gross sellers of Rs 1,925 crore.

India VIX

·         Volatility for 8^th October, 2010 close at 21.40 which is 4.68% lower as compared to previous close, after touching an intraday high of 22.45 and low of 21.03.

Implications: Indian VIX plunged on Friday’s trading session and has been consolidating around these levels. We expect it to move upwards and we are Bullish on the same.