Nifty future is trading at a premium of ~36 points to November future. Consecutive second trading session of major writing in put than call at 6,100 strike indicates market taking support at this level for intermediate term and thereby setting for an up move. However, on the upside, 6,200 continues to act as a resistance on account of more cal writing and 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: Shedding was seen at in-the-money strikes with maximum at 6,100 CE. Whereas fresh writing was seen at higher strikes with majority at 6,300 CE and 6,200 CE of 2.7 lakh shares respectively. Concentration is witnessed at 6,300 CE of 47.44 lakh shares.
· Put Writing: On the other hand, fresh writing in puts was seen across strike prices for consecutive second trading session with majority at 6,100 PE and 6,200 PE of 5 lakh and 3.76 lakh shares respectively. Concentration is witnessed at 6,000 PE of 60.29 lakh shares.
Implications: Consecutive second trading session of strong writing in put than call 6,100 strike price indicates market would take support at this level with upward bias. However on the upside 6,200 level continues to act as a resistance on account of more call writing and 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 02nd November, 2010 close at 21.25 which is 1.58% higher as compared to previous close, after touching an intraday high of 21.86 and low of 19.43.
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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