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.
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