In today trading sessions, market was quite volatile during first half and towards second half we have observed recovery and closing with marginal negative. The recovery was mainly on account of activity on 5,400 PE strike price was 2x the call options. On options front, higher activity was seen at higher levels in call options and more Put writing at lower strike price, which indicates market to trade in a narrow range with limited downside from current levels. We expect market to bottom out for the near term for currents levels because of PE concentration at 5,500 and 5,400. However, we also do not except any major upside in the market because of call open interest at 5,500 to 5,700 strike price. The strategy to be adopted by an trader would be to initiate fresh Buy at current levels and sell at every rise.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 31st January, 2011 close at 23.4 which is 3.7% higher as compared to previous close, after touching an intraday high of 24.7 and low of 22.6
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