Derivatives Daily Update:30.08.2011

Derivatives Update:30.08.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4976	5021.55	4924	5003	69.85
BANKNIFTY	29/09/2011	9400	9555	9340.5	9521.65	176.65

Nifty September Futures opened with a gap for second day in a row. It opened at 4976, made a low of 4924, went straight up to 5021.55, finally closing at 5003 up by 69.85 points. In similar fashion Bank Nifty too opened with a gap and closed up by 176.65. points. Both indices were able to make higher top higher bottom for 2 days in a row.

SYMBOL	EXPIRY	OPENINT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	22861500	-344000	4028550	80571	28267
NIFTY	25/10/2011	1014600	172300	93900	1878	1430
NIFTY	24/11/2011	127500	59050	15450	309	72

Traded quantity, No. of contracts traded as well as No.of trades showed significant improvement which indicate some change in pattern. Earlier on rising days this figures were remaining negative, but today they are positive with rising markets. In contrast Open Interest has fallen by 344000 shares which shows that no fresh buying is coming in the market and bears are covering their shorts.yesterday too we saw that Open Interest came down though markets managed to close higher.

Today's analysis of trading pattern still signifies that we are in downward trending market and this rise of 2 days may be considered as pull back. All the traditional indicators have crossed their respective averages in oversold zone which might be able to stretch the markets further but whether they move into positive zone or again turn weak will have to be watched carefully. With rise of 300 points in Nifty from its low of 4718, we still don't see Bulls aggressively striking back with vengeance. On the contrary some weak bulls are getting out of the market.

Closer analysis of weekly data of Nifty shows that after a huge fall Nifty has managed to pull back by nearly 61.8% which is important retracement level. Let me elaborate a bit. If we assume that bear trend started from 6349, Nifty fell from there to 5175 level, than it pull back up to 5900 level which is 61.8% of fall. It again fell from 5900 level to 5182 level and pull backed up to 5760 which is 61.8%. It finally fell from there and made a low of 4718. If  we assume that market has habit of repeating the pattern, maximum it can pull back up to 5350 levels and than a downward trajectory might continue and we may fall further and make a new low.

My prognosis is Simple we are in a long down trend. Advise is to sell short at every rise till we see any meaningful breakouts.If you are a day trader and in a rising market if you want to venture a bull trade keep strict stop loss of 4835 which is long term(200WMA)average with a price objective of 5350.

Till then, Happy Trading.

Derivatives Daily Update:29.08.2011

Derivatives Update:29.08.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4805	4948	4802.3	4933.15	184.45
BANKNIFTY	29/09/2011	9077	9374.85	9060	9345	371.5

Nifty September Futures  opened with a bang today. It opened with a gap of 57 points went just tag below opening price, made a high of 4948, finally closing at 4933.15 up whooping 184.45 points. Of course it made a higher top higher bottom. Bank Nifty too went up with vengeance making bears to run for the cover.

SYMBOL	EXPIRY	OPENINT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	23205500	-1023400	-4107950	-82159	-24527
NIFTY	25/10/2011	842300	104400	41850	837	-401
NIFTY	24/11/2011	68450	40200	26500	530	208

Data on volume chart doesn't support fully to the today's movement. Data indicates short covering in the market. On a rising day Open interest has come down by 1023400 shares. Traded quantity, contracts and no. of trades were all lower than yesterday signalling that no fresh new bull positions have built up in the market. As indicated in earlier posts many technical indicators were in oversold zone so a pull back was always expected which we have witnessed today.

Analysis of data leads us to believe that today's upward move has to continue for few more sessions without making any further low and breaking the resistance level of 4970 for near term and 5191- 5371 zone for slightly medium term. If it fails to breach this resistance zone downward bias may continue. Certain technical indicators like RSI, Stochastics, MACD are in oversold zone and have managed to cross their respective averages, which indicates change in trend. But after a few bullish sessions if this indicators again start moving in to negative territory, we can witness further fall, which might take Nifty below 4718 levels.

So idea is to trade with caution and with downward bias.

Derivatives Daily Update:26.08.2011

Derivatives update:26.08.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4855.3	4887.9	4718	4748.7	-90.9
BANKNIFTY	29/09/2011	9210	9254.9	8905.95	8973.5	-203.75

Nifty September Futures started on a weak note continuing its downward spiral effortlessly, making lower top & lower bottom continuously for the second time in a row. Bank Nifty was even worst performer and it too made lower top lower bottom for second time in a row. As stated in earlier posts, we are in strong downward trending market and it was witnessed in today's trading session also. First day of new series was not able to able to bring any cheers to the market instead it brought tears to the market.
 

SYMBOL	EXPIRY	OPENINT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	24228900	2621450	8214400	164288	57029
NIFTY	25/10/2011	737900	146200	312650	6253	3855
NIFTY	24/11/2011	28250	2250	49250	985	609

Volume Charts also indicate weakness. We can see that on a down day,traded quantity, no.of contracts, no.of trades were higher by 8214400,164288 & 57029 respectively. Even increase in open interest indicate fresh short sales being created in markets.

As indicated in yesterday's post, Nifty September future very easily broke important support level of 4835(200WMA) which was acting as some good support. Since we have broken this level and even 4786, a pivot point we might go & touch 4667 from where rally started & lasted till 6349. One important observation is that it is difficult to break 200 week's moving average, but once it breaks it gives violent move to the market. Last time when it broke 3785 the than 200WMA Nifty violently made a low 2228. Similarly when it broke 3790 the than 200 WMA on upside it made a high of 6349. This is simply an observation just to reiterate the point that 200WMA acts as a good support & resistance.

My prognosis remains the same, we are in strong bearish markets and still there are no signs of reversal. Certain traditional indicators like RSI, Stochastic, MACD are trading in oversold zone but no meaningful divergence is seen on the charts. One who is short in the market, ride the wave keeping 4850 as stop loss for short term, 4925 for medium term and 5191-5337 as long term Stop. If one is brave & initiated long since market have fallen so hard, 4650 is advisable stop.

Derivatives Daily Update:25.08.2011

Derivatives Update 25.08.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	25/08/2011	4901.05	4912	4831.1	4839.6	-44.25
BANKNIFTY	25/08/2011	9351.15	9417.15	9137	9177.25	-141.35

Nifty August Futures opened at 4901.05(4930), made a high of 4912(4961.95), drifted way down to 4831.10(4867.30) & finally closed at 4839.60(4883.85) down by 44.25 points.As it can be seen from the data that it has again started making lower tops & lower bottoms. Bank Nifty was more precarious. As indicated in yesterday's post that Bank Nifty is weaker and some unwinding is seen in the market, it continued with the same trend today making lower top & lower bottom. Today was expiry day & it has closed near the low of series which was 4801.

SYMBOL	EXPIRY	OPENINT	CHG IN OPINT	TR QTY	CONT	TRADES
NIFTY	25/08/2011	9118550	-4238950	-900200	-18004	-9837
NIFTY	29/09/2011	21607450	5822400	4875650	97513	40966
NIFTY	25/10/2011	591700	113700	100550	2011	985

Above data indicates shifting of positions to September series. Traded Qty Traded Contracts were higher than August Series. Bias is towards Markets going down as on a downward trending day open interest has increased.

Analysis of markets indicate that we are in a strong downward trending market & still no respite is seen. After loosing some 700 points in Nifty in August Series no meaningful pullback is being witnessed. Pullback lasted for only 2 days.

My view still remains bearish. Only silver lining is, as said earlier, level of 4835 which is 200 WMA. Today also it breached that level but on closing basis Nifty has managed to close above this support area. But with the carnage that we have seen in banking stocks and Bank Nifty and fact that Nifty has more weightage from banking stocks, it will not be surprising that we may break this level of 4835 tomorrow itself. In that case we are heading towards 4650 levels from where the last leg of bull trend started. If it fails to break this level than we might move sidewards for few trading session. But for Nifty to have made meaningful bottom it must clear the resistance zone of 5191-5337.

Till than trade safely & look for some meaningful breakouts.

Derivatives Daily Update:24.08.2011

Derivatives Update:24.08.2011
  

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE
NIFTY	25/08/2011	4930	4961.95	4867.3	4883.85
BANKNIFTY	25/08/2011	9401.1	9567	9275.05	9318.6

Nifty August Futures opened at 4930, made a high of 4961.95, drifted lower to 4867.30 and finally closed at 4883.85 down by 63.55 points. It remained within the the range of yesterday's high & low. It was not able to make higher/lower top or bottom today, thereby ending its two day streak of making higher top & higher bottom. Bank Nifty, on the other hand broke yesterday's high(9520) & also yesterday's low(9280) closing substantially lower than yesterday's close(9480.3). this signifies fresh selling or unwinding in banking stocks.

SYMBOL	EXPIRY	OPENINT	TR QTY	CONT	TRADES
NIFTY	25/08/2011	-2668250	799700	15994	2613
NIFTY	29/09/2011	6833900	4370150	87403	18243
NIFTY	25/10/2011	30000	28500	570	261

Analysis of the above data just confirms the weakness in market. On a downward trading day when both volume and open interest increases we can safely assume that some shorts are created in the market or momentum is biased towards markets further going down.

Analysis of today's movement  indicates that we are in strong down trend. Nifty has continued its downward journey and does not show any signs of stopping any time soon. Tomorrow is expiry day and data of carry over in to new series might give indication where we are headed in September series. But if premium are any kind of indication than it does not show signs of positive developments as Nifty September series was trading with just 5 premium. Anyway as indicated in earlier post some silver lining is still exist if Nifty is not able to close below 4835 which is 200 WMA. Even if Nifty remain above this level and it is possible as traditional technical indicators are in oversold zones, at the most we can see some dead cat bounce as we witnessed for last two days. For Nifty to have made meaningful bottom, it must fill up the gap of 5337-5191 which it made on 05.08.2011. Twelve trading session has passed since this gap which is again making this zone as strong resistance area.

My prognosis is simple, Markets are in downward momentum, If you are a bull trader, stay away from the market, wait for the expiry to be over. Look for some stability & meaningful bottom formation. But if this lower levels lures you towards trading, trade with strict stops. If you are a bear trader ride the wave and enjoy the journey. But you too look at the levels carefully, especially 4835. If it breaks add new positions and wait for the panic to cover your shorts.

Derivatives Daily Update:23.08.2011

Derivative Update:23.08.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE
NIFTY	25/08/2011	4927	4973.2	4865.1	4947.4
BKNIFTY	25/08/2011	9449.9	9520	9280	9480.3

Nifty August Futures opened at 4927, went down to 4865.10 in first session of the market, made a high of 4973.20 and finally closed at 4947.40 gaining 36.95 points.Consequently for the 2nd day in a row Nifty was able to close higher than its previous session. It was also able to form higher top and higher bottom with relation to previous session for continuously 2nd day which is heartening.

SYMBOL	EXPIRY	OPENINT	TR QTY	CONT	TRADES
NIFTY	25/08/2011	-4436700	1084950	21699	-15551
NIFTY	29/09/2011	2912350	2824450	56489	8405
NIFTY	25/10/2011	49000	9650	193	65

 From other important data, we can see that traded qty & No.of Contracts have improved by 1084950 & 21699 in August series & have improved by 2824450 & 56489 in September Series. We can see reduction in open interest in August Series & build up in September series.

My prognosis about the market is that we are in downward trending markets. Though there are signs of recovery in markets as Nifty is closing in positive zone for 2 consecutive days, one should bear in mind that, we started Nifty August Series with 5500+ levels and from their we have drifted to as low as 4800. which is a fall of 700 points. There is bound to be a pull back and we are witnessing the same. One good thing is that Nifty has taken support at 4835 which is 200 week's moving average. As indicated in earlier post long term weekly averages work as excellent support & resistance. But for Nifty to have made a meaningful bottom, it has to fill up the gap of 5337-5191 which it made on 05.08.2011. If it breaches that gap & trades about that level for few days, 4800 might be considered good bottom. Till than be cautious and trade with strict stops.

For bulls who could not resist themselves can venture a bull trade with a strict stop at 4825 levels and add further only after some sustainable bottom in place.

Derivatives Daily Update:22.08.2011

Derivatives Update:22.08.2011

NIFTY

25/08/2011

4850

4921.75

4816.1

4910.45

Nifty August Futures opened at 4850, went down to 4816.10, made a high of 4921.75 & closed at 4910.45. up by 59.60 pts. Today Nifty stopped its downward movement. It made a low of 4816.10 which is above yesterday's low of 4801. It made a high of 4921.75 which is above yesterday's high of 4903.30. So for the first time after many days it has made a higher top higher bottom. It has almost filled the gap of 4870-4926.40.

		OPEN INT.	TR QTY	CONTRACTS	TRADES
NIFTY	25/08/2011	-1727950	-6962800	-139256	-41810
NIFTY	29/09/2011	1377250	1678400	33568	3175
NIFTY	25/10/2011	11750	-144800	-2896	-975

As seen from the above chart, Traded Qty. is down by 6962800, No of Contracts are down by 139256 & No.of Trades are down by 41810 in August Futures. Open Interest is down by 1727950 in August Futures but up by 1678400 in Sept. Futures. On a rising day volumes are less which shows lack of momentum & it is bit worrisome.

Today's activity shows some short covering. As indicated in earlier post Nifty has taken support at 4835 which is 200 WMA. But to draw any bullish inference from this is bit early. Markets were in oversold zone as indicated by many traditional indicators and accordingly we have seen some bounce back. For Markets to have formed some meaningful bottom, Nifty has to breach the gap of 5337-5191 which it has made on 05,08.2011 and trade above that or alternatively it has to trade above 4835 for few days without further breaking the low of 4801. Till then, it is advisable to short Nifty with relevant stops.

Derivatives Daily Update:19.08.2011

Derivatives Update: 19.08.2011

Nifty continued its downward journey in full swing. Nifty August futures opened at 4870 again making a gap up opening from yesterday's close of 4926.40, it went up to 4903.30 not even reaching yesterday's close, nosedived to 4801.10, finally closing at 4850.85. It was down by 75.55 points.

Nifty even today made lower top lower bottom. Today was 10th trading session where Nifty has closed lower than yesterday's close barring two days where it closed marginally higher, though it was never able to bridge the gap of 5191-5337 which it made on 05.08.2011. Today it has again made a gap of 4870-4926.4 which will defy all bullish traders.

On volume charts, Traded qty. in August Future was higher by 5524900, No. of contracts traded were higher by 110498 & No. of trades were higher by 32765. September futures were higher by 1883900,37678 & 15643 respectively.

Open Interest in August future was lower by 910850 but was higher by 989550 in September future.

Analysis of the today's activity shows that we are in strong down trend. Nifty is not able to breach the gap of 5191-5337 which it made on 05.08.2011. To add fuel to the fire it has made a new gap of 4870-4926.40. As indicated in earlier post, If nifty is able to take out low of 4951 which it made on 09.08.2011, it will try to test 4835 which is 200WMA. Today itself it breached the same level with aggressive momentum. Though Nifty has closed marginally above 4835, it is pertinent & important that it should fill the gap which it made today to prima facie make a case of market to turn upwards from here. Normally long term averages(200 periods) on weekly charts are meaningful support & resistance, one needs to be cautious to trade at this level. Even expiry is approaching so markets are bound to remain choppy. FII has bought Index Futures of Rs 403 cr, Index Options of 900 cr and sold Stock Futures of Rs383 cr in today's session.

Advice to trade cautiously with downward bias as of now.

Derivatives Daily Update: 18.08.2011

Derivatives Update:18.08.2011

Nifty August Futures literally crashed today. Nifty August Futures opened at 5055.65 hardly made a high of 5075.65 crashed down to 4926.40 & finally closed at 4938.05. Today Nifty August was down by 128.70

Nifty again made lower top lower bottom. Today's high of 5075.65 was far below 5126 yesterday's high & low 4926.4 was far below 5014 yesterday's low. Trend is strongly down. Today Nifty August futures breached the low of 4951 which it made on 09.08.2011 & made a new low of 4926.40.

On volume charts, traded qty. in August future was low by 672850, No. of contracts were low by 13457 & total trades were down by 11504. Though they were high by 684250, 13685 & 6844 in September Futures respectively.

Open Interest increased by 722150 in August series & 297650 in September series.

My prognosis of market remains bearish. Nifty Futures are constantly under pressure. My firm view(as indicated in earlier post) was Nifty will try to touch 4951 as it was not breaching the gap of 5191-5337 which it made on 05.08.2011. I further said that once this level of 4951 is taken out Nifty futures will try to touch 4835 level which is 200 WMA. Today FII activity doesn't indicate any reversal in the trend as today FII sold Index Futures worth 327 cr & Index option worth 275 cr. Indicators of the overseas markets are also not so conducive. Though some traditional indicators are in oversold zone pull backs are always possible. Advice is to sell in every rise still we see some meaningful bottom in place.

Derivatives Daily Update:17.08.2011

Daily Update: 17.08.2011

Today nifty opened at 5040, made a high of 5126 going straight down to 5014 closing marginally up at 5067(5040).

Prognosis remains the same. Nifty August Future is not able to breach the gap of5191-5337 which it made on 05.08.2011 and trying to touch 4951 which it made on 09.08.2011. Today also it remain short of yesterday's high of 5140 by 14 points. It even didn't touch yesterday's low of 5006.

On volume chart, trading volumes were higher than yesterday. Traded quantity was higher by 6627100 lacs shares, No.of contracts were up by 132542 and No. of trades were up by 48503. Open interest was down by 1169600 shares.

Though overall trend is strongly down, some of the traditional indicators are in oversold zone which might lead to some pull back.

Strategy still remains the same. Sell on every rise till it breaches this gap and trade substantially above 5337 for few days.

Derivatives Daily Update: 16.08.2011

Derivatives Update: 16.08.2011

Once again Nifty futures closed lower at 5040(5080). Instead of favourable global cues & after long week end, Nifty futures opened higher at 5125, made a high of 5140, went down straight to 5006 & closed at 5040. Weakness in the market persists. Looking to the open interest figures of friday, which went up by around 10 lacs Nifty in a falling market leads us to believe smart people are shorting the market. Technically, we are witnessing lower lows & lower highs from last 3days. More importantly it is not able to breach the gap that it made on 05.08.2011 of 5337-5191. I still hold the view that Nifty futures will try to test low of 4951 which it recently made on 09.08.2011. In case if it is not able to hold this level of 4951, there is every chance that it will test 4835 which is 200 WMA(Weekly moving average). God forbid if it breaks this level than we can see violent breakdown. Last time it broke when 200 WMA was 3785, Nifty went down to 2228 in matter of just few trading sessions. So Be cautious & watch levels very carefully.

Daily Update: 12.08.2011

Daily Update: 12.08.2011

Markets were down today. Nifty futures closed at 5074(5137). Instead of better overhead clues with American Markets closing substantially higher yesterday, Nifty futures opened at 5175 made a high of 5181, went to make a low of 5052, finally closed at 5074. Inherent weakness in the market was witnessed once again. Nifty is not breaching the gap of 5191-5337 which it made on 05.08.2011. I reiterate my earlier view that Nifty will try to once again reach the recent low of 4951. Once it reaches there and stays in trading range for few days without making new low might change my thought process. If it breaches recent low of 4951 than it might go up to 4750-4850 level.

Daily Update -11.08.2011

11.08.2011

Nifty is struck in a range. Though overseas markets were very weak overnight especially US markets (Dow down 520 pts. & Nasdaq dn 101 pts.), Nifty Futures opened lower at 5130 (5159) just 29 pts dn. it made a low of 5122 & high of 5187. It seems that markets are bit oversold and shorts are lending supports at weak openings. Any way still it is too early to make any comments. I still hold the view that Nifty will try to touch the low it made earlier of 4951. For it to go up substantially from that bottom, it will have to bridge the gap that it made on 5.08.2011 (5337-5191.)

Daily Update-10.08.2011

Date:10.08.2011

Markets more or less remained rangebound. Nifty after opening on firm ground on back of global cues could not feel up the gap it made on 05.08.2011.(5337-5191). So today's movement can at the most be concluded as pull back. Possibilty is there that it might try to touch low which it made yesterday of 4951. Once it reaches there without making a new low and consolidating for few days, view than might be taken to buy with small stop below 4950. Till than remain cautious.

Financial markets: Looking for the bottom | The Economist

Financial markets: Looking for the bottom | The Economist