Weekly Market Outlook 2nd Week of June 2010-Buy on Dips to Mildly Bearish-Disclaimer Post Applies

Indian and Global Markets - Overview

This past week we saw the market open at 5076 levels and rose till 5147 before ending at 5135. We also saw the markets make a low of 4961 in the week which makes volatility a very unwelcomed guest. The Nifty is trying to claw its way back up to the 5200 mark and based on the options chain and the FII activity it looks possible as well. However the global bad news inflow will be too much for our markets to with stand. FIIs have been buying since the 2nd day of June 2010 but in very small amounts (~Rs. 100cr. - ~Rs 200cr. daily) which adds to some sentimental boost but we will not be surprised if they start turning into heavy sellers in the markets.

For the Nifty on the downside if 5000 is broken, support comes in at 4850. So for us 4850 – 5000 will be the zone to watch out for on the Nifty. We have witnessed major put concentration from 4800 – 5000 as well which makes us believe that 4850 – 4900 should be strong support zones for the Nifty. However for an investor we advise to wait out for the second week of June to play out so that we know if 4800 is broken and the downside extends to 4300 – 4500 or if 4800 - 5000 level holds for the Nifty. I would slowly start buying in the markets if the FIIs are net buyers as of end of day on Monday the 7th of June 2010.

We believe that for Monday 5050 should be strong intraday support for the Nifty but if 5050 is breached and the Nifty stays below if for the first one hour of trade on Monday we might be in for some serious downside.
On the options side, the picture is not as bad as the global sentiment. Consecutive third trading session for overall activity in higher call options and at 4900 / 5000 put which signifies some support on the Nifty.

Call Writing: Call writing observed at the strike prices of 5300 / 5400. Major addition of open interest is at 5200 of 6.1 lakh contracts and then at 5300 / 5400. Currently, 5200 should act as major resistance for near term.

Put Writing: Strong fresh writing between 5000 & 4900 strike prices. 5000 added open interest of 7.4 lakh contracts and 6.8 lakh contracts at 4900. 4900 should act as a major support for the June series on account of concentration of 74.1 lakh contracts.
Current month PCR declined from 1.25 to 1.18. Profit booking would be viable strategy at current levels and go short above 5350 – 5400 levels.


In Fridays trading sessions, FIIs were net buyers of Rs 100 crore with Gross buyers of Rs 1,962 crore and Gross Sellers of Rs 1,862 crore. DIIs were net sellers of Rs 126 crore with Gross buyers of Rs 903 crore and Gross sellers of Rs 1030 crore.
Globally, we seem to be back to square one. US payrolls data fell short of expectations leading to a belief that the US economic recovery might be thrown of track amid fears of contagion of debt crisis in the EU region.

Seller’s reclaimed control of the US stock market after it had put together solid back-to-back gains. The change in tone came amid renewed concerns about contagion in Europe and disappointing nonfarm payrolls data.

Though Hungary uses the forint instead of the euro as its currency, the country's troubles make for a manifestation of the fears spawned by the tenuous fiscal and financial conditions throughout Europe. In turn, the euro dropped a precipitous 1.7% to set a new four-year low of $1.1956
The savings rate in the U.S. climbed to 3.6 percent in April, the highest level since January, from 3.1 percent in March as incomes increased and purchases cooled, according to Commerce Department figures released May 29, 2010. US Treasury Secretary Timothy Geithner too told his Group of 20 counterparts that the pace of the global recovery depends on domestic demand in Japan and Europe, and countries shouldn’t rely on spending by U.S. consumers which adds to global recovery concerns.

Asian stocks climbed to an 11-week high, emerging-market currencies rallied and bond risk fell on signs an economic recovery is gathering pace in the U.S. and Japan, the world’s two largest economies. U.S. indices too ended up higher by almost 0.7% post the March employment numbers. Car sales were seen higher too due to better deals available in the market.

Amidst the entire crisis we as Indian retail investors must not forget the India growth story. Corporate India's performance during the previous fiscal reflected better top line and bottom line growth. The top 25 major industrial houses (according to sales) posted a 17.4% rise in net profit during 2009-10. They had reported a decline of 5.3% in net profit during the previous fiscal. On the other hand, the top line growth of the companies decreased from 20.1% to 15.8% during 2009-10. This is a very simple reason to be buyers in the Indian markets on every dip with a long term perspective.

Also, with the new government policies of 25% public holding must for all listed Indian companies there might be some serious downside in certain specific stocks.

¬Commodity Market Overview

This week will continue to be bad for the commodities market. We believe that with demand fears a sell off is bound to occur in the commodities market. We have attached the inventor to price graphs for 4 of the leading commodities globally. Aluminum, Zinc, & Copper should fall this week by at least a 2% - 3% along with Lead. We still maintain that

We’ve been bullish on Gold since it was at $1000 and today it has reached $1200/ounce and is still inching higher. We believe that 2010 too will be the year to be invested in Gold. Our view which was in tandem with Jim rogers on crude too is falling into place with crude already entering the $65/bbl to $70/bb zone.

View on Indices - Weekly Outlook

1. Bank Nifty
a. This index just broke out of its 9400 zone and is now headed towards 9500. However with heavy global bad news inflow we believe that this index will get beaten down. We would be buyers in this index on every dip. On the downside if 9300 is broken then this index can go down to levels of 9000 where it should find some support. Upside for the moment is capped at 9550. There is a gap in this index at 9200 levels which could get filled on Monday itself.

2. CNX 100
a. This index is trading at 5105 and is trying to capture the 5150 mark but it might not happen this week. We believe that this index will fall down to fill its gap at 5000 levels which should be a decent point to enter in this index stocks. The gap should also act as support for this index and if broken below the 5000 levels we could see a renewed sell off in the markets.

3. CNX IT
a. This index too as its peers is trying to touch higher levels but due to global news flow will be beaten down. This index also has a gap at 5775 levels which should act as support and get filled on Monday morning. 5750 should be a good entry point in this index. TCS should be a hot favorite pick

4. Nifty Midcap 50

a. This index is trading at 2691 and is facing still resistance from 2720 -2750 levels. This index can test 2640 – 2650 on the downside and the upside is capped at 2700 / 2720.

5. S&P CNX Nifty
a. This index is trading at 5135 and we believe that the downside should find support at 4900/5050/5100. The upside for this index is capped at 5230 – 5300. High risk traders can short the Nifty at 5135 with a stop at 5160 and a target of 5040.

Trading Stocks Ideas
1. Federal Bank – CMP 341
a. Short for a target of 330 (3% return)
b. Stop loss at 350

2. Hind Copper – CMP 475
a. Short for a target of 457 (4% return)
b. Stop loss at 500

Speculative buy on open on Monday – Unitech around 65 – 68 levels for a target of 72 within the week.

Posted By:
KARTIK GALA
(BUSINESS DEVELOPMENT)

Congrats Mrs. Nutan Rajendra Dhulla for clearing NCFM in Derivative Markets (Dealers Module).

Our student Mrs. Nutan Rajendra Dhulla cleared her NCFM in Derivative Markets (Dealers Module) today with 69.5%. She has cleared the exam within a weeks time to prepare.
We congratulate her for this success and hope she gets such success in future.

Thanks,
DENIP Investment Academy.

Upcoming Corporate Actions Along with their Ex-Dates in June & July 2010.

POSTED BY:
KARTIK GALA
(Business Development)

Markets Today - 3/6/2010 - Disclaimer Post Applies

Implications: Decrease in volatility, higher put writing than calls at 5,000 levels indicates market taking support at this level. So, we expect the market continue the current momentum and trade above 5,000 but below 5,200 for intermediate term. The range for the June series would be 4,800 to 5,200 on account of concentration of open interest.

Option Analysis

·         Call Writing: Fresh writing was witnessed between 5,400 and 5,200 strike prices with majorly at 5,200 strike price of 5.72 lakh shares. In today’s trading session, 5,100 and 4,900 strike prices have witnessed major shedding where the combined open interest decrease is 8.57 lakh shares. Concentration is at 5,200 of 67.35 lakh shares.

·         Put Writing: On the other hand, major writing was witnessed at 5,100 and 5,000 strike prices of 18.49 lakh shares and 17.66 lakh shares respectively and marginal shedding was witnessed at 4,700 strike price. Concentration has shifted from 4,900 to 4,800 strike price where the open interest stands at 67.94 lakh shares.

 Implications: Major put writing and concentration at 5,000 levels indicates that it would act as a support for short term and 4,800 for the June series, whereas the upside is capped at 5,200 on account of concentration of open interest. We expect the market to trade in the range of 5,200 to 5,000

FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 406 crore with Gross buyers of Rs 2,109 crore and Gross Sellers of Rs 1,703 crore.

·         DIIs were net buyers of Rs 79 crore with Gross buyers of Rs 1,103 crore and Gross sellers of Rs 1,024 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 3^rd June, 2010 close at 25.29 which is 8.90% lower as compared to previous close, after touching an intraday high of 26.02 and low of 25.29.

Implications: Volatility, as mentioned before is moving downward. We expect volatility to come down further and thus suggest going short on the same.

Markets Today - 2/6/2010 - Disclaimer Post Applies

Nifty futures are now trading at a much lesser discount (just 4 points) to its spot price. With Nifty up by 1% and the FIIs still selling we believe that unless there is a follow up buying seen from the FIIs fresh new shorts will enter the system tomorrow. However as mentioned earlier, we expect Nifty to take a strong support at 4800 -4900 levels whereas 5000 - 5100 to act as strong resistance. Fresh put writing suggest that the Nifty might bounce back sharply from the current levels.

 Option Analysis

·         Call Writing: Fresh addition of open interest at higher levels and concentration indicates that the Nifty might actually test 5100 post which 5200 will act as a major resistance for June Series. In today trading session, major activity was observed at 5200strike prices which added 7.63 lakh contracts.

·         Put Writing: On the other hand, 4900 strike prices witnessed higher activity as compared to lower levels which is good for the markets. Major writing was witnessed at 4900 strike price in today’s trading session of 9.84 lakh shares and marginal shedding at 5200 strike price. Concentration is observed at 4900 strike price of ~64 lakh contracts. This indicates that 4900 should act as a decent support for the markets.

 Implications: Higher activity in out-of-money call strike prices and put strike prices indicates less possibility for any major upside movement. However, on account of concentration the upside is capped at 5200 levels and the downside is limited to 4800 levels.

FIIs and DIIs activity in capital market segment

·         FIIs were net sellers of Rs 166.5crore with Gross buyers of Rs 2,220 crore and Gross Sellers of Rs 2,387 crore.

·         DIIs were net buyers of Rs 165.16 crore with Gross buyers of Rs 1,331 crore and Gross sellers of Rs 1,166 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 1^st June, 2010 close at 27.76 which is 4.54% lower as compared to previous close, after touching an intraday high of 29.27 and low of 27,76.

Implications: We believe that Volatility will now start to peak out and one can go short on volatility on every rise.

which is a better option - MIP, fixed deposit or FMPs?

When investing money for a year which is a better option - MIP, fixed deposit or FMPs? This article gives you an insight.

Fixed deposits:
Better than savings account are the other investment options like bank fixed deposits schemes. One can invest in a FD with varying maturities. If you need certain amount of money after 1 year, you can invest in for 1 year FD for that much amount and for other amount can have FDs of different maturity.

This will help you meet the liquidity needs and also earn interest. You can go for the regular returns options like the quarterly or half-yearly payout options. Else, you can choose interest re-investment option.
However, remember that interest income earned in FD and savings account is taxable.

FMPs:
Fixed Maturity Plans (FMPs) are income/debt schemes giving a fixed return over a period of time. They are actually similar to fixed deposits in banks. The maturities offered were varied, going from one month to three years. They are close ended schemes, which are open only for a fixed period of time during the initial offer. While the money is locked, FMPs give the investor an option to exit, which is subject to an exit load as per the funds regulations.
While similar to FDs, there are certain differences. While the returns on FDs are assured, returns on FMPs are indicative as there is a possibility of the actual returns deviating from what has been indicated to investors at the time of investing. The instruments are held till maturity, thus not getting affected any interest rate fluctuations.

The schemes have low credit risk as investments are mainly done in AAA or P1+ rated instruments with a short-term maturity profile. Further, it has minimal liquidity risk as they invest in short-term instruments, which give them adequate liquidity. Also the churning cost is very low as the instruments are held till maturity.
Taxation of FMP depends on the investment option. In the dividend option, investors have to bear the Dividend Distribution Tax. In growth option, returns earned are treated as capital gains- i.e. if investments are held for less than a year, than the interest income is added to the investor's income and is taxed at the marginal rate of tax.

As for long-term capital gains, the tax liability is computed using two methods i.e. without indexation (charged at 10% plus surcharge) and with indexation (charged at 20% plus surcharge) and). The tax liability will be the lower of the two.
However, on the flip side, there are no fixed returns in FMP's. It can be lower than what was indicated earlier. Further, here is usually some penalty for early liquidation (before maturity) that can lower or even erode your capital. And one cannot invest anytime in FMPs as they are not available anytime you want them.

MIPs:
Monthly Income Plans (MIPs) are hybrid instruments that invest some portion (around 5 %-20 %) in equities and the balance in debt and money market instruments.
It provides monthly income to investors depending upon monthly, quarterly, half-yearly and annual options selected by the investors. MIPs aim to provide investors with regular payouts in for of dividends. However, it is not mandatory for the funds to declare dividends and is subject to availability of distributable surplus.

While there is growth option to available in MIP, the return will not be in form of dividend but capital appreciation. Some portion of the funds is invested in equities. This provides impetus to the returns while retaining the safety from the debt investments.
It is like icing on the cake and would generate higher returns than the debt fund, albeit with a little higher risk. MIPs are launched with the objective of giving monthly income to investors. MIP is better for investors who are nearing retirement. MIP's appeal to conservative as well as risk taking investors.

Risk in MIP's:

The debt portion is influenced by the interest rates. When the interest rate falls, the NAV rises as price of bond increases. When interest rate rises, NAV falls. At such times the equity portion of the fund helps to maintain the returns.

While equity portion makers it more risky than the pure debt fund, they are better than the balanced fund where investment in equity is to the extent of 40% to 50%. And with Indian markets expected to do good in the long term, MIPs would stand to gain.
On the tax front, they are better than FDs as dividends are tax free in the hands of investors, while interest on FDs is taxable.
Thus considering one's risk bearing capacity and investment objective, one can decide on either of these three investment avenues.

What is better --- A Bank Deposit or a FMP?

Lately the interest rates on bank deposits have increased leading many investors to wonder whether a simple Bank Fixed Deposit would serve better than having to go through the process of investing in an FMP. Though Bank FDs and FMPs currently offer a similar rate of return; the tax impact tilts the scales in favour of the FMP.
Interest on bank FDs is fully taxable whereas the return from FMPs is either subject to the Dividend Distribution Tax (for the dividend option) or the capital gains tax rate (for the growth option).
The Distribution Tax rate @14.16% or the capital gains tax rate @10% are lower than the income tax rate, especially in the case of investors in the higher tax bracket. Tax directly eats into returns, which is why FMPs have the edge over Bank FDs.

To illustrate this point, have a look at the following table. It is assumed that both, the Bank FD as well as the FMP yield the same rate of interest i.e. 10.25% p.a. An investment of Rs. 1 lakh is made in an FMP of 91 days. The corresponding figures for the Bank FD appear alongside.


Source: rediff.com
Today markets are extremely choppy. Depending upon whom you talk to, either a severe correction is round the corner or the market is going to go up by a couple of thousand points more. Though no one has seen what tomorrow will bring, common sense indicates that a post tax yield of almost 9% is too good to ignore.
If you are looking for a fixed income avenue that yields a reasonable return with minimum risk, adequate liquidity and tax efficiency, FMPs will provide you with an effective shelter.

Prepared By:

RISHMA SHETTY
(BUSINESS DEVELOPMENT)

Is Systematic Investment Plan the right option to minimize risk?

Systematic investment plan offers periodical investment option, which is especially designed for those investors, who do not want to invest their money lump sum, in fact it’s for those who want to invest their money in mutual funds but in periodic intervals.

It works similar to the process of deposit money every month in a bank but difference is that of course it is an investment in mutual funds. This opportunity allows investors to buy shares on regular schedule. Mostly this is done through account deduction. Remember systematic investment plan is the plan which helps you to achieve your investment goals rather a tool which improves your returns.

The prime goal of this investment plan is to help investors to identify their investment objectives and help them out to achieve these goals by giving them systematic investment mechanism of equity related mutual funds. These mutual funds provides steady investment plan but all the value depends on the portfolio of the mutual fund. Many analysts think that systematic investment plan and monthly income plan is somewhat the same thing with different names.

The difference is systematic investments plan is managed by a group of investment professionals, who have expertise in risk assessment and reduction, portfolio management and diversification, minimize trading cost, flexibility of liquidity, and access to corporate information. Simply it is a most simple, time oriented formula crafted to help investors for accumulating money over longer course of time. It is considered to be a most effective strategy to invest money in volatile markets. It has the ability to handle the volatility of the market in disciplined way. It is the best technique to mitigate the risk of investor’spoolmoney.

This is the best way for individuals to earn returns on safe investment through systematic investment plans. This is the best way to get a start to your investment and enter into a mutual fund. It is a long term investment plan in which you can’t withdraw your money immediately, it takes at least two to three years, when you can withdraw your money. Despite all this, systematic investment plan is the safest option for investment in MFs.

Why to invest in (SIP) Systematic Investment Plan?

1. Discipline

The cardinal rule of building your corpus is to stay focused, invest regularly and maintain discipline in your investing pattern. A few hundreds set aside every month will not pinch your monthly disposable income too much. You will also find it easier to part with a few hundreds every month rather than investing a big lump sum in one go.

2. Power of compounding

Investment gurus always recommend that one must start investing early in life. One of the main reasons for doing that is the benefit of compounding. To explain with an example. Person A started investing Rs 10,000 per year at the age of 30. Person B started investing the same amount every year at the age of 35. When they attained the age of 60 respectively, person A had built a corpus of Rs 12.23 lakh while person B’s corpus was Rs 7.89 lakh. A rate of return of 8% compounded has been assumed. So the difference of Rs 50,000 in amount invested made a difference of more than Rs 4 lakh to their end corpus. That difference is due to the effect of compounding. The longer the compounding period, the better for you.

Now instead of investing Rs 10,000 each year, suppose person A invested Rs 50,000 after every 5 years, starting at the age of 35. The total amount invested, thus remains the same, which is Rs 3 lakh. However, when he is 60, his corpus will be Rs 10.43 lakh. Again, he loses the advantage of compounding in the early years.

3. Rupee cost averaging

This is especially true for investments in equities. When you invest the same amount in a fund at regular intervals over time, you buy more units when the price is lower. Thus, you would reduce your average cost per share or per unit over time. This strategy is called 'rupee cost averaging'. With a sensible and long-term investment approach, rupee cost averaging can smooth out the market's ups and downs and reduce the risks of investing in volatile markets.

We can sum it up saying that, "In developing economies like India, where securities markets (equities and fixed income instruments) can be volatile and it is rarely possible to time the markets and predict the future. We can seldom accurately predict when a particular stock will move up or where the interest rates are headed."

" Also Systematic Investment Plan makes the volatility of the securities markets work in your favor. Since the amount invested per month is a constant, the investor ends up buying more units when the price is low and fewer units when the price is high. Therefore, the average unit cost will always be less than the average sale price per unit, irrespective of the market rising, falling, or fluctuating. This concept is called Rupee Cost Averaging (RCA)."

Prepared By :

RISHMA SHETTY
(Business Development)

Markets Today - 1st June 2010 - Disclaimer Post Applies

Nifty futures are trading at a huge discount because of dividend. With Nifty down by ~2% and increase in current month open interest by ~8%, we believe fresh short positions have been built up in the  future segment. However, we expect Nifty to take a strong support at 4800 -4900 levels whereas 5000 - 5100 to act as strong resistance.

 Option Analysis

·         Call Writing: Fresh addition of open interest at higher levels and concentration indicates 5,100 to act as a major resistance for June Series. In today trading session, major activity was observed at 5,000 and 5,100 strike prices which added 8.78 lakh shares and 4.54 lakh shares respectively.

·         Put Writing: On the other hand, lower levels strike prices witnessed higher activity as compared to higher levels. Major writing was witnessed at 4,300 and 4,400 strike prices of 10.9 lakh shares and 9.77 lakh shares respectively and marginal shedding at 5,100 and 5,200 strike prices. Concentration is observed at 4,800 strike price of ~58 lakh shares.

 Implications: Higher activity in out-of-money call strike prices and put strike prices indicates less possibility for any major upside movement. However, on account of concentration the upside is capped at 5,100 levels and the downside is limited to 4,800 levels.

FIIs and DIIs activity in capital market segment

·         FIIs were net sellers of Rs 526 crore with Gross buyers of Rs 1,801 crore and Gross Sellers of Rs 2,328 crore.

·         DIIs were net buyers of Rs 210 crore with Gross buyers of Rs 1,220 crore and Gross sellers of Rs 1,009 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 1^st June, 2010 close at 29.08 which is 9.16% higher as compared to previous close, after touching an intraday high of 29.34 and low of 26.67.

Five reason for ‘RETIRMENT PLANNING’

If we were certain about the future, planning for it would be very precise. The exact life span of every individual is unknown, if left to natural devices. Also unknown is whether our life situations may change dramatically. The benefit of planning for retirement is that we anticipate the risks and circumstances that we might face. Protecting your financial future would include the two major dimensions of financial planning; protection and accumulation products. Where retirement is concerned, the following are compelling reasons to protect your long-term future:

1) Continued employment is not a guarantee
Provided that we save throughout our work life, we'd have enough reserves to have money working for us ultimately. However, this is not always the case. Economic strife, downsizing, critical illness and disability are forces that may curtail our employment or employ-ability significantly. We cannot assume that we'll continue working up to retirement or past it. There is simply no guarantee for that. We must therefore have products like disability income plans, critical illness benefits and emergency funds even in retirement to help us deal with the possibilities arising from uncertainty.

2) Risk of outliving your savings
The risk of outliving your savings is better known as longevity risk. This risk is increasing because the average life expectancy of both males and females is on the rise. If you do not save enough for the golden years, you may reach a stage of financial dependence early in your retirement phase. On average, we should cater for thirty years of retirement. Clearly, not everyone lives so long. The concept of averages suggests that you may be one of those with an extended run. It is much better to have than to have not.

3) Other debilitating risks like inflation and purchasing power risk.
Inflation risk is the erosion of financial returns as a result of a contraction of demand or expansion of the money supply. Inflation risk reduces the real return of your savings. Diversifying your portfolio is one means of protecting your savings against this risk. Purchasing power risk is the erosion of the purchasing power of a dollar as a result of the increase in living expenses. Purchasing power risk lowers the real value of your income, even if the nominal value is increasing. Not catering for future certainties like inflation, reduced purchasing power and taxation would leave you struggling in the present and future.

4) Additional health problems and increased health risks as we get older
The risks of illnesses increase with age. Many people develop conditions or diseases well into their retirement phase. With these come additional medical expenses that need to be covered. These may range from prescriptions to operations. The expenses may either be prohibitive or ongoing. If you have insurance in place to take care of these crippling expenses, then you would rest comfortably knowing that your savings won't be absorbed by niggling expenses or medical disasters.

5) You may have dependents in your golden years
Again, we do not know what the future may hold. Even if your children are grown, you may have financial dependents if something happens to them and they are not covered. You may have grandchildren who are orphaned as well, so nothing can be taken for granted. The savings that you dreamed of may be absorbed by unforeseen events such as these. If you use proper financial planning, you would have provisions in place for these occurrences.

Risks generally arise because of uncertainty, making it necessary to guard against several negative possibilities. Everyone would have specific risks based on their respective situations. Having health insurance is a critical first step in protecting your financial future. Financial planning is relevant to us at all life stages. The priorities may change, but the importance of covering risks is undeniable.
Posted By :
KARTIK GALA

Markets Today - 31/5/2010 - Disclaimer Post Applies

Implications: Nifty trading at huge discount (not a bearish signal) because of dividend payout in a lot of companies. Higher call activity above 5,200 strike prices along with major put writing at and below 5,000 levels indicates markets to be range bound. However, we see the markets to trade in the range of 5,200 and 5,000.

Option Analysis

·         Call Writing: Fresh writing of call was witnessed at higher strike prices. 5,400 strike price added 3.73 lakh shares whereas ~4.5 lakh shares were added at 5,300 and 5,200 strike prices. Major concentration is still observed at 5,100 of ~54 lakh shares. 

·         Put Writing: On the other hand, in today’s trading session fresh writing witnessed between 4,800 and 5,100 strike prices when combined open interest build up is ~24.59 lakh shares with maximum at 5,000 strike price. Concentration is observed at 4,800 strike price of ~57 lakh shares.

 Implications: Heavy call writing at higher levels indicates less upside to be seen from current levels. Whereas, fresh put writing at lower levels with majority at 5,000 levels indicates strong support at lower levels. So we expect the market to trade in a narrow range of 5,200 and 5,000 for few trading sessions.

FIIs and DIIs activity in capital market segment

·         FIIs were net buyers of Rs 586 crore with Gross buyers of Rs 2,301 crore and Gross Sellers of Rs 1,714 crore.

·         DIIs were net sellers of Rs 73 crore with Gross buyers of Rs 902 crore and Gross sellers of Rs 976 crore.

India VIX (Inverse relationship between Nifty and Indian VIX)

·         Volatility for 31^st May, 2010 close at 26.64 which is 8.89% lower as compared to previous close, after touching an intraday high of 28.59 and low of 26.43.

Implications: Volatility maintained yesterday level and did not change much for today’s session.