Markets Today - 16/11/2010 - Disclaimer Post Applies

Nifty future premium has reduced to ~6 points as compared to previous trading session. More of call writing between 6,200 and 5,900 and put shedding at out-of-the-money strikes implies that market is facing resistance at every higher level and there is lack of confidence for any major upside breakout. Nifty has a support at 5,900 for intermediate term on account of more of put writing than call, however, we expect Nifty to bounce back above 6,000 levels on account of major put concentration, whereas the upside is capped at 6,200 for November expiry

Option Analysis:

·         Call writing: Major writing was witnessed between 6,300 CE and 5,900 CE and shedding was seen in rest of the strikes. 6,000 CE and 6,200 CE added 27.89 lakh and 14 lakh shares respectively. Major shedding was seen at 6,500 CE of 10.74 lakh shares. Concentration is witnessed at 6,300 CE of 94 lakh shares. 

·         Put Writing: On the other hand, writing in put was seen in in-the-money strikes and shedding at out-of-money strikes. Major writing was witnessed at 5,900 PE of 10 lakh shares and shedding at 6,100 PE of 16 lakh shares. Concentration is witnessed at 6,000 PE of 75 lakh shares.

Implications: More of call writing between 6,200 and 5,900 and put shedding at out-of-the-money strikes implies that market is facing resistance at every higher level and there is lack of confidence for any major upside breakout. Nifty has a support at 5,900 for intermediate term on account of more of put writing than call, however, we expect Nifty to bounce back above 6,000 levels on account of major put concentration, whereas the upside is capped at 6,200 for November expiry.

FIIs and DIIs activity in capital market segment

·         FIIs were net sellers of Rs 196 crore with Gross buyers of Rs 3,157 crore and Gross Sellers of Rs 3,353 crore.

·         DIIs were net buyers of Rs 449 crore with Gross buyers of Rs 1,542 crore and Gross sellers of Rs 1,092 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 16^th November, 2010 close at 21 which is 4.35% higher as compared to previous close, after touching an intraday high of 22.4 and low of 17.5.

Implications: Indian VIX Surged and thereby closed at 21. We expect it to move upwards and are Bullish on the same which would have negative impact on Nifty.