: Nifty future is trading at a premium of ~34 points to November future. Strong writing in put than call along with increase in PCR at 6,100 strike indicates market would take support at this level for intermediate term. However, on the upside 6,200 continues to act as a resistance on account of more call concentration than puts. Thus the range for November expiry is 6,300 on the upside and 6,000 on the downside.
Option Analysis:
· Call writing: Major shedding was seen at in-the-money strikes with maximum at 6,100 CE and 6,000 CE by 6.72 lakh shares and 2 lakh shares respectively. Whereas fresh writing was seen at higher strikes with majority at 6,400 CE of 5.7 lakh shares. Concentration is witnessed at 6,300 CE of 43.55 lakh shares.
· Put Writing: On the other hand, writing in puts was seen across strike prices with majority at 6,100 PE and 6,000 PE of 19.34 lakh and 6.84 lakh shares respectively. Concentration is witnessed at 6,000 PE of 60.29 lakh shares.
Implications: Strong writing in put than call along with increase in PCR at 6,100 and 6,000 strike prices indicates market would take support at these levels and may continue its upward momentum. However on the upside 6,200 level continues to act as a resistance on account of more call concentration than puts. The range for Nifty for November expiry is 6,300 on upside and 6,000 on the downside.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 01st November, 2010 close at 20.9 which is almost flat as compared to previous close, after touching an intraday high of 21 and low of 20.31.
Implications: Indian VIX traded in a narrow range. We expect it to move upwards and we are Bullish on the same which would have negative impact on Nifty.
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