We saw an extremely volatile session today with a negative outlook ahead of the F&O expiry happening this Thursday. The ups and downs during the day were high enough for investors to enter an exit but equally doubtful of a carry forward. Second part of the day saw heavy selling pressure even though Reliance Industries gave support to the markets. On the other hand, more call activity was seen than put activity, 5,500 and 5,600 CE added open interest of 9.4 and 1.9 lacs shares. Concentration of PE and CE is being observed at 5,400 and 5,600 strike price. We believe market not to go below 5,400 because of concentration level, So an traders should reverse their position at 5,400 and go long on market with target of 5,600. Technically, market managed to close away from the day’s low even though in red. But the outlook seems to be weak and it is having support at 5436 and 5420 while the resistance still is at 5500 and 5535 levels.
India VIX (Inverse relationship between Nifty and Indian VIX)
· Volatility for 22nd February, 2011 close at 26.8 which is 7.8% higher as compared to previous close, after touching an intraday high of 28.1 and low of 24.9
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