Derivatives Update:24.08.2011
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.
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.
| 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.
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