Derivatives Daily Update:30.09.2011

Derivatives Update:30.09.2011

On price charts. Nifty October Futures closed down by nearly 2% at 4934.30. It remained within yesterday's range making a high of 5031 and low of 4920.10. Bank Nifty too closed lower by nearly 2.5% at 9422.60. Bank Nifty was not able to surpass yesterday's high but broke yesterday's low signifying weakness in banking shares. All in all selling pressure was witnessed in the market on price charts.

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4999.8	5031	4920.1	4934.3	-81.15
BANK NIFTY	29/09/2011	9600	9633.15	9386.75	9422.6	-230.8

On volume charts, total turnover was 94000 cr, no.of contracts were 38.36 lac approx. Put Call Ratio was 1.28. As yesterday was last day of series comparison of volume is not justified. As can be seen from the data underneath, traded quantity, no. of contracts as well as no.of trades has increased substantially but no great change in Open Interest is seen though being a first day of new series. It shows lack of participation from positional traders. As said in yesterday's post, as such Open Interest in Nifty was lower than last series. Volume charts suggest that traders are cautious and not willing to commit any new positions.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	19640200	302700	6277150	125543	50281
NIFTY	24/11/2011	1046750	122550	174450	3489	2338
NIFTY	29/12/2011	39000	-219000	-124550	413	303

On technical charts, it is once again vindicated that we are in a downward trending market. No pull backs are sustainable and are met with selling interest in market. On daily charts there is no indication of trend reversal. Nifty is finding it difficult to cross even short term averages (10 day & 20 day) which is 4998 & 5020. Nifty from last one month is trading in a range of 4718-5174. It is becoming extremely important on which side Nifty will break this range. With India VIX, a volatility measure which measures the risk as perceived by markets in near term, ruling at 32 coupled with downward price movements indicates that we will break the range on lower side.  Actually Nifty will break on lower side or not, even after breaking will it sustain those levels or not only time will tell because levels around 4700 are strong multiple support zones. If Nifty manages to break this level on sustainable basis we might go and find support at 4282. Till that time shorting the Nifty is best option.

On Stock futures front, actively traded counters were Reliance, State bank, Reliance Capital, ICICI Bank and Tata Steel. Top gainers were Sesa Goa 5% GSPL% 4% Mcleod Russel 4% Srei Infra 4% Bata 3%. Top losers were Reliance Capital-13% KFA -12% Rcom -8% Sintex -7% and Voltas -7%

On Stock Options front, actively traded counters were Reliance 820 CE Reliance 800 PE Reliance 800 CE State Bank 2000 CE and Tata Steel 440 CE.

On Nifty Options front, substantial positive change in Open Interest was seen in 4900 CE (478200) 5000 CE (921400) 5100 CE (889750) 5200 CE (730700) 5300 CE (391150) 5400 CE (536200) 4300 PE( 782750) 4400 PE (2337550) 4500 PE (1089750) 4600 PE (1088700) 4700 PE (1004150) 4900 PE (649400)

My prognosis of the market is no different than what I am telling from last many days. We are in a strong downward trending market. There are no technical indicators which suggest trend reversal. Volatility in the market is high, participation is less and pull backs are getting sold off. It is advisable to go short in Nifty with stop loss above its short term averages of 4992 & 5020 for extremely short term traders. For medium to long term traders advisable stops are 5175-5240 5360. Ride the bear wave till we see any sustainable bottom formation supported by sustainable rally with good volumes.

Happy Trading...

Atul Doshi

Derivatives Daily Update:29.09.2011

Derivatives Update:29.09.2011

On price charts, Nifty made a low of 4902.50 bounced back to 5036.25 and finally closed at 5015.45 up by 78.80points. Bank Nifty made a low of 9396.25 bounced back to 9684 and closed at 9653.40 up by 154.50 points.As it can be observed pressure was there on Banking shares as Bank Nifty was not able to cross yesterday's high(9688) and it breached yesterday's low of9420.

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4925.05	5036.25	4902.5	5015.45	78.8
BANK NIFTY	29/09/2011	9456.1	9684	9396.25	9653.4	154.5

On volume charts, as it can be observed from following data, traded quantity, no.of contracts traded and no.of trades on net basis has improved. Even Open Interest in Nifty October has improved but as said in yesterday's post built up is not at last series level. On 26.08.2011 last day of last series Open Interest in September series was seen at 24228900, compare to that it is 19337500 for October series today. It shows cautious approach on part of participants.

 

EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
29/09/2011	12852800	-2671400	-815300	-16306	-13537
25/10/2011	19337500	5314600	5348800	106976	40969
24/11/2011	924200	61000	85950	1719	1293

On technical charts, today's price movement can be labeled as pull back. Nifty has managed to cross its short term moving averages but one need to be convinced about its sustainability. Such pull backs are just flash in the pan and they whither out in couple of days. Though nothing is visible on the charts that suggest reversal of trend, it is true that Nifty is not breaking the low of 4718 which it made on the first day of last series. It is equally true that it is not closing below 4813 which is 200 week's moving average. Are we making bottom between 4718 and 4813 levels?, coming sessions will answer that. On bit longer term horizon, level of 4766 is 38.2% fibonnacci retracement level of super wave of 2228 & 6349. It can be considered very important support level. Point I am trying to make is we are trading at multiple long term supports which are not easy to break and if such supports are held we can witness a good rally. If Nifty manages to break this level on closing and sustainable basis we might touch 4282 which 50% retracement level of super wave.

On Stock Futures front, actively trade counters in October series were Reliance, State Bank, JSW Steel, Tata Motors and Tata Steel. Top gainers were JP Associates 7% Bombay Dyeing 6% Alok Ind 6% India Cement 6% Adani Power 5% While losers were KFA -7% Sun TV -6% JSW Ispat 5% Rolta -5% ABB -5%.

On Stock Options front, actively traded counters were Reliance 800 CE State Bank 1950 CE State Bank 1900 PE State Bank 2000 CE and JP Associates 70 CE

Substantial  positive change in Open Interest in October Series was seen in 5200 CE (1564600) 5300 CE (524900) 4200 PE (785900) 4700 PE (666650) 4800 PE (975000) 4900 PE (860900) 5000 PE (845300) Negative change was seen in 5000 CE (-245850)

In conclusion, I still believe that we are in downward trending market and nothing on daily charts suggests signs of trend reversal. We are embarking on new journey from tomorrow with fresh series. Movements of price, volume and technicals will be crucial and are required to be watched very carefully. On longer term charts we are taking supports at multiple support zones as expressed in this post. Whether we will be able to make meaningful bottom somewhere in this regions or not only time will tell. Till that time trade cautiously with strict stops.

Happy Navrartri and of-course Happy Trading...

Atul Doshi

Derivatives Daily Update:28.09.2011

Derivatives Update:28.09.2011

 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4989	4995	4906.2	4936.65	-41.2
BANK NIFTY	29/09/2011	9671	9688	9420	9498.9	-144.4

On price charts, as can be observed from above Nifty almost traded in the range equivalent to yesterday's high/low (4989.10/4905.5) but closed lower by 41.2 points at 4936.65. Bank Nifty too followed the trend closing at 9498.90 down by 144.40 points.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	15524200	-1560500	-820350	-16407	-6384
NIFTY	25/10/2011	14022900	3102800	3515400	70308	19507
NIFTY	24/11/2011	863200	67250	150	3	-329

On volume charts,as can be seen from above data traded quantity, no.of contracts and no.of trades were higher on net basis. Open Interest in September series came down whereas it has increased in October Series. It is difficult to judge the data when we are at fag end of the expiry but if we make a wild guess Open Interest on net basis have increased in a falling market which signifies some short has been added on in new series. Open Interest on 25.08.2011, day preceding last month's expiry was 21607450 which was much higher than today. On 26.08.2011 last expiry day it was 24228900. We need to see such built up is happening tomorrow or not. Significance of this observation is to check whether participants are actively participating in the market or not.

On technical charts, once again it is vindicated by today's price movements that we are in downward trending market and Nifty is not able to surpass resistance zone. Volatility as measured by India VIX  is still ruling higher at 32 restricting participation in the market.On a down day Open Interest is increasing meaning thereby that Bears are active in the market. Pull backs are short-lived. No signs of trend reversal visible up till now. Important resistance level are 4978- 5010-5175-5362. Important support are 4819-4718. we are in a absolute range and not able to break on either side.

On Stock futures front, actively traded counters were Reliance, State Bank, DLF, ICICI Bank and Infosys. Top gainers were Hexaware (6%) GSPL (5%) Ruchi Soya (4%) Jain Irrigation (4%) HCL Tech (3%) While Top Losers were JSWHL (-8%) Rel Cap (-7%) Max (-7%) JSW Steel (-7%) KSOil (-7%)

On Stock Options front, Increase in Open Interest was witnessed in 4900 CE (1025200) 5000 CE (653100) 5100 CE (491000) 4800 PE (1096750) 4900 PE (678700) while Decrease in Open Interest was witnesses in 4700 CE (-353650) 5200 CE (-368100) 4500 PE (-270050) 5100 PE (-177900)

Active Series were State Bank 2000 CE Reliance 800 CE DLF 220 CE State Bank 1950 PE and Reliance 780 PE

My prognosis is biased towards markets going further down. We are almost over with current expiry and Nifty has by and large remained range bound between 4718 and 5175. Nearly five times Nifty has attempted to break above 5150-5175 range but has not succeeded in its attempt. It has even attempted to break 4718 but there too it has not succeeded. Volatility has remained extremely high during current series. All in all it was a boring series and traders are eagerly waiting for meaningful breakout which I hope will come in October series. Till the time any such breakout come ride with the trend and enjoy.

Happy Trading...

Atul Doshi

Derivatives Daily Update:27.09.2011

Derivatives Update:27.09.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4909	4989.1	4905.5	4977.85	133.55
BANK NIFTY	29/09/2011	9521.1	9675	9501.1	9643.3	253

On price charts, Nifty smartly bounced back making higher top higher bottom and closing at 4977.85 up by 133.55 points. Similarly Bank Nifty too made higher top higher bottom closing up by 253  points at 9643.30.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	17084700	-4528800	-7534500	-150690	-51174
NIFTY	25/10/2011	10920100	3070100	1165600	23312	-3731
NIFTY	24/11/2011	795950	92000	4650	93	-121

On volume charts, traded quantity, no.of contracts traded as well as no. of trades were substantially lower than yesterday. Even Open Interest  on net basis after shifting decreased by nearly 14 lacs shares clearly indicating short covering in the market. Whooping rise in price of both indices was not supported by volume charts. Bulls and Bears have become extremely cautious as we are nearing the expiry. Volatility as measured by India VIX was at 32 down from yesterday's level.

On technical charts, activity of today suggest pull back in the prices. Nothing significant can be construed from today's activity. No indicator of major trend reversal is visible today. For trend reversal Nifty has to trade above 5175 in shorter term and above 5362 in medium to long term. Unless we break this levels, we are in downward trending market and every rise in price is an opportunity to sell in the market. No panic on either side is witnessed in the market yet. As said in earlier post if someone wants to venture a buy contra trade, it has to be done with strict stop of 4819 & 4718.

On stock futures front, actively traded counters were State Bank, Reliance, ICICI Bank, JSW Steel and Tata Steel. Top gainers list included DLF 8% Hexaware 7% Tata Motors 7% IVRCL Infra 7% BEML 6% While top counters which lost ground were Sun TV -3% KSoil -2% JSW Steel -2% Fortis -1% Divis Lab -1%

On stock options front, actively traded counters were State Bank 2000 CE, Reliance 800 CE, Reliance 780 CE DLF 210 CE Reliance 780 PE. Significant increase in Open Interest was seen in 5000 CE (543850) 5100 CE (358150) 5200 CE (552100) 4900 PE (2660500) 5000 PE (2583500). While decrease in Open Interest was seen in 4700 Ce(-812650) 4800 CE( -1578450) 4900 CE (-567800) 45oo PE (-324200) 4600 PE (-393600) 4800 PE (-310150)

To conclude, nothing material has changed which signifies reversal in trend, We are in downward trending market, trading largely in a range of 4700-5200. Breakout above or below will have a potential to change or confirm further continuation of trend. Till that time respect the market and ride with the trend.

Happy Trading...

Atul Doshi

Derivatives Daily Update:26.09.2011

Derivatives Update:26.09.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4869.8	4879	4756.1	4844.3	-26.4
BANK NIFTY	29/09/2011	9374	9479.5	9160.05	9390.3	17

On price chart, Nifty made a lower top lower bottom and closed marginally down at 4844.3 by 26.40 points.Bank nifty too made a lower top lower bottom and finally closed at 9390.30 up by 17 points.

 

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	21613500	-2090700	-2296550	-45931	-26072
NIFTY	25/10/2011	7850000	2331100	3099850	61997	9518
NIFTY	24/11/2011	703950	92950	-23150	-463	192

On volume charts, it can be observed that activity is being shifted to October series. Change in Open Interest is largely due to shifting in October series. Net change in open interest is 2.20 lac shares approximately. Nothing can be construed from the volume chart except that shifting is done by participants.

On technical charts, we are still on weaker wicket. As can be seen from today's price movements both the indices have failed to cross yesterday's high and have made lower lows. It can be observed that it is making every effort to touch 4718, its recent low. Volatility as measured by India VIX was ruling around 35 which is still at its peak. No signals of trend reversal is seen in the immediate future. Some silver lining for bulls is that Nifty is taking some support at 4819 (200 WMA) on closing basis. It is not closing below this level decisively. But this can be viewed just as temporary relief. On the whole trend is still down and unless and until we see some meaningful break out, it is advisable to trade short in the market.

On Stock Futures front, active counters by volume parameter were State Bank, ICICI Bank,Reliance Ind, Tata Steel and Axis Bank. Top gainers list included Arvind Mills 5% ABG Shipyard 5% DLF 4% JPAssociates 3% Central Bank 3% while Top losers were Hind Oil -9% NCC -9% Titan -8% GMR Infra -6% Coal India -6%

On Stock Options front actively traded Stocks were Reliance 760 CE, State Bank 2000 CE Reliance 800 CE State Bank 1900 PE State Bank 1950 CE. Noticeable increase in Open Interest in Nifty Option series was seen in 4700 CE (625050) 4800 CE (995100) 4900 CE (835800) 5000 CE (952050) 4700 PE (361850) 4800 PE (287900). Decrease in Open Interest was seen in 5100 CE (-423700) 5200 CE (-333400) 5300 CE (-211100) 4900 PE (-381950) 5100 PE (-346200)

To summarize, nothing on price, volume and technical charts suggest any trend reversal. We are in downward trending markets where all resistance levels are met with good amount of supply and all support zones on down side are revisited. Both price wise and time wise we are running out of steam. One push downward, will break the spine of market and we might see lower levels as low as 4300-4500. Expiry is nearing, volatility is still at its peak and we are at crucial levels. Extreme caution is warranted. Watch technical break outs happening and than only venture a trade that too with strict stop.

Happy trading

Atul Doshi.

Derivatives Daily Update:23.09.2011

Derivatives Update:23.09.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4879	4935	4818.6	4870.7	-43.2
BANK NIFTY	29/09/2011	9444.9	9537.9	9262.25	9373.3	-121.1

On price charts, nifty september futures took the clue from global markets and opened lower at 4879 went down to 4818.60, bounced back to 4935 and finally closed at 4818.60 down by 43.2 points. Bank nifty too followed the trend and closed at 9373.30 down by 121.10 points.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	23704200	-318550	1731600	34632	16095
NIFTY	25/10/2011	5518900	756400	1520850	30417	11199
NIFTY	24/11/2011	611000	44450	55550	1111	450

On volume charts, traded quantity, no. of contracts as well as no of trades were substantially higher than yesterday, Open interest for september futures was lower by 318550 shares while for october futures it was up by 756400 shares. No significant observation can be made except some unwinding in september futures might have taken place.

On technical analysis front, we saw continuation of downward trend. As said in yesterday's post, Nifty in its downward journey will break 4893 (61.8% retracement of 4900-5175) and 4819 (200WMA). Today we saw Nifty broke 4893 and exactly touched 4819. We are still in a strong downward trending market and in coming days nifty will again attempt to break 4819 and will try to touch 4718, its recent low. No immediate indication of trend reversal is visible so far. All traditional indicators like RSI, Stochastics, MACD have again turned weak indicating further weakness. Nifty has created one more gap of 5141-5010 which will again act as resistance zone besides gap 0f 5337-5191. As can be observed from this price movements, there are many headwinds which nifty has to clear for any meaningful break out. Any pull backs are the best opportunities to short the market. For those who want to venture a contra trade,though not advisable in my opinion, can buy nifty with strict stop at 4819 and 4718.

On stock futures front, top traded counters were State Bank, Reliance, ICICI Bank, Tata Steel and Tat Motors. Top gainers were Deccan Chronicle 5% Opto Circuits 4% Patni Computers 4% Mphasis 3% Rpower 3%. Top losers were Jain Irrigation -8% Chambal Ferti -7% NMDC -6% ABB -6% and Tata Motors -5%.

On stock options front, State Bank 1900 PE, 1950 CE, 2000 CE, Reliance 780 CE, 800 CE, and 780 PE were highly active contracts. Significant increase in Open Interest was seen in 4700 CE(562350) 4800 CE (1531350) 5000 CE (1183500) 5100 CE (681200) 4500 PE (448100) 4600 PE (2696100) while significant decrease in Open Interest was seen in 5300 CE (-1247300) 4700 PE (-870500) 4900 PE (-553000) 5000 PE (-403800) 5100 PE (-565300) 5200 PE (-720650)

To conclude, analysis of price movements and volumes leads me to believe that we are in a downward trending market. Every pullback of price to resistance zone is met with strong supply, not allowing nifty to clear those zones and all so called support zones are visited and breached. In such scenario it is advisable to trade short till any meaningful breakout happens. Volatility is high, expiry is near so trade with care my dear.

Happy Trading

Atul Doshi

 

Derivatives Daily Update:22.09.2011

Derivatives Update:22.09.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5010.1	5061.95	4898.15	4913.9	-227.4
BANK NIFTY	29/09/2011	9774.9	9774.9	9465.05	9494.4	-418.65

On price front it is evident from the above data that there was absolute blood on the street. Nifty after opening at 5010.10(fluke or small trade) actually opened around 5060 level made a moderate high of 5061.95, was not able to hold those levels, drifted straight down to 4898.15,finally closing weaker at 4913.90, down by 227.40 points. It was perhaps the largest fall in absolute terms since October 2008 and largest percentage fall since August 2009. Bank Nifty too sold off in a similar fashion and gave a close of 9494.40 down by 418.65 points.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	24022750	2251950	13890800	277816	73045
NIFTY	25/10/2011	4762500	823700	1992750	39855	20245
NIFTY	24/11/2011	566550	60500	43150	863	786

On volume charts, There is a huge amount of increase in Traded Quantity, No. of Contracts traded and No. of Trades coupled with humongous increase in Open Interest by whooping 2251950 shares. On a down day Increase in volumes suggest that Bears have aggressively shorted the Nifty Futures.What more confirmation one need that we are in a strong downward trending market.

On technical charts, my several days analysis as expressed in numerous earlier posts is being smartly vindicated today. I was constantly saying that Nifty is not able to surpass 5175 level from various days and it is the stiff resistance. Yesterday also it went up to 5173.90 but did not break those levels. Similarly Nifty was not able to break 4900 level and hence made a trading range of 4900-5175. Today it broke 4900 and made a low of 4898.15. Preciseness of technical level and its importance has once again been established.Volatility as expressed by India VIX was once again at its peak. It can be fairly construed that we are in a strong downward trending market as important resistance level(5175) attracts huge selling in the market making difficult for Nifty to surpass those levels. In addition to it intermediate support zones(4901) are being visited very fast and very easily breached. Now obvious question is where we are headed?. Some short term analysis shows that we have almost reached 4893(61.8%) of small trading range of 4901-5175 and held that range on closing basis. Once we break this in coming session probably we may test 4819 (200WMA) and after that recent low of 4718. Whether we form a double bottom at 4718 level needs to be closely watched. Any further analysis beyond 4718, we will do when we cross the bridge. Till that time ride on your short positions. Once again I remind you to be very cautious in trading as volatility in the market is at its peak which might puncture your pockets. Nifty to reverse this down trend has to correct to 5362 level in remaining sessions of this expiry. As said yesterday all the major down wave starting from 6349 and more importantly last one which started from 5760 and ended at 4718 took 34 sessions. It need to correct the major portion (61.8%) of this fall which is 5362 in 21 session(61.8% of 34). If it corrects in this stipulated time we can argue that both price wise & time wise it has passed the test and there is a case of trend reversal.

On Stock Futures front, Active counters by volume were Reliance Ind, State Bank, ICICI bank, Tata Steel and DLF. Top gainers were Indian Oil, Ruchi Soya, Hind Petro, Sobha Developers and Areva all were up by 0.5 to 1%. Top Losers were S kumars -11% Educomp -10% Renuka Sugar -10% JP Associates -10% Godrej Ind -9%.

On Stock Options front, Top five traded Option Series were State bank 2000 CE, Reliance Ind 800 PE, 800 CE 820 CE 840 CE. Change in Open Interest in Nifty Option Series was as under

 

NIFTY	OI CHG	OI CHG
SERIES	CALL	PUTS
5500	-248,200	-1,850
5400	-366,900	-2,950
5300	-528,100	-68,450
5200	-77,050	-1,804,400
5100	1,204,100	-2,566,350
5000	1,387,200	-2,346,350
4900	2,372,100	-760,650
4800	650,000	933,700
4700	-21,450	1,753,900
4600	-11,850	421,600
4500	-25,000	624,850

My prognosis that we are in a major down trend is vindicated today. I stick to my analysis as expressed in earlier posts, that we are in downward trending market and till we see any break out or other technical indication such as bottom formation around 4718 levels, one should short the Nifty. Volatility is at its peak so large swings are expected in the market. Don't loose your patience and consider all those pull backs as mere noise and ignore them. Technical Analysis is far ahead and any change in trend reversal will be visible on charts. So keep your cool and trade short till you see any other indicator on chart which suggests reversal.

Happy Trading

Atul Doshi

Derivatives Daily Update:21.09.2011

Derivatives Update:21.09.2011
 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5150	5173.9	5113	5141.3	-14.3
BANK NIFTY	29/09/2011	9826	9954	9798.05	9913.05	86.25

On price charts, Nifty September has traded in a very narrow band today. As it is evident from the data, Nifty Futures made a high of 5173.9 and a low of 5113. It closed at 5141.30 just 14.3 points down. It made a higher top higher bottom today. Bank Nifty too made a higher top higher bottom pattern and closed in a positive with 86.25 points gain.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	21770800	-1141150	-5138850	-102777	-30988
NIFTY	25/10/2011	3938800	200850	-127850	-2557	-1447
NIFTY	24/11/2011	506050	66450	56600	1132	68

On volume charts, Nifty September Futures doesn't impress me. As can be observed from the data, Traded Quantity, No. of Contracts Traded as well as No. of Trades were all substantially down than yesterday. Even Open Interest has fallen by 1141150 shares. It shows lack of participation coupled with bull liquidation. Some built up is seen in October series but nothing to talk about.

On technical charts, it is observed that today also Nifty Futures was not able to surpass 5175 level which I am talking about from several days. As soon as Nifty approaches this level we see good amount of supply coming in to the market which restricts price movement beyond this level. It is equally true that Nifty is not even breaking on lower side.We are 6 sessions away from expiry so good amount of activity is anticipated in the market. Volatility as measured by India VIX has come down from its peak level but it is still on higher side. From last 14 trading session we are trading in a range of 4900 -5175 which is nearly 5%. As said in my earlier posts, whether we will be able to surpass 5362 (61.8%) of last fall from 5760 to 4718 in coming days till expiry is required to be watch carefully. In coming days if we are not able to surpass this level than we might drift down lower than 4718.

On Stock Futures front, State Bank, Reliance, ICICI bank, Tata Motors & Axis bank were the highest traded counters. Top Gainers list included India Cement 6% Bombay Dyeing 5% Arvind 5% NCC 5% Century Textile 5% while Top Losers were Hero Motors -3% Hindalco -3% Maruti -3% Cairn Energy -3% Reliance -2%.

On Stock Options front SBI 2000 CE, SBI 2050 CE SBI 2100 CE, Reliance 840 CE, LT 1600 CE were highest traded counters. Nifty Call Option Series 5200 5300 5400 saw increase in Open Interest by 370700 163450 264150 shares respectively. Nifty Put Option Series 4800 4900 5100 5200 saw increase in Open Interest by 1200350, 728950, 261100, 325750 shares, while Nifty Put Option Series 4700 4600 4500 saw reduction in Open Interest by 856550 210550 160950 shares.

My prognosis is still tilted towards Nifty drifting downwards as no sign of break out is visible. Every time we approach resistance zone, bout of supply comes which restricts upward price movements. Though neither Bull nor Bear is aggressive in the market as both the players are waiting for some breakout. Days till expiry are becoming very crucial as it  also coincides with the required days(21) to correct the bear trend (5760-4718). Whether Nifty will be able to do that or not only time will tell. Till that time trade cautiously in the market with a downward bias.

Happy Trading...

Atul Doshi

Derivatives Daily Update:20.09.2011

Derivatives Update:20.09.2011
 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5039	5167.8	5035.35	5155.6	118.45
BANK NIFTY	29/09/2011	9568.65	9859.95	9557.5	9826.8	263.1

On price charts it can be observed that Nifty September future has again resumed its upward movement. Nifty September Future after opening, went very marginally down at 5035.35 and than for the whole day  went up very steadily closing at 5155.60 gaining 118.45 points. Bank Nifty too followed the trend and gave a close of 9826.80 gaining 263.10 points.

 

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	22911950	-876700	5972150	119443	31798
NIFTY	25/10/2011	3737950	427700	333400	6668	3826
NIFTY	24/11/2011	439600	26350	14450	289	241

On volume charts, it can be seen from above data that with rise in traded quantity, no. of contracts traded and no of trades, Open Interest has come down by 876700 shares which clearly shows that there was short covering in the market and Bull was not at all aggresive in the market.

On technical charts, Nifty September Future has seen a good traction in price and has bounced back sharply giving a close above 5150 but was not able to clear resistance zone of 5175. Even volume chart has failed to impress me as it indicates that with rise in price & volume, participation from Bull was almost absent as no new positions have been added to Open Interest. As said in earlier post, one observation is that, Nifty has managed to correct 61.8% of its down trend in less than half time. Last bear trend which started from 5760 & ended at 4718 took 34 days. From 4718 to till date it has consumed 14 trading days. Still there are 3 trading days left and even to logically extend Fibonnaci No. of 61.8% to even time wise correction, it should correct up to 5362 (61.8% level) within 21 trading session. If it fails to do so one can fairly conclude that we are in major down trend and we might fall again and make a new low (lower than 4718). If we are able to reach 5362,  don't fall from there and trade above those level with good volume and participation for few trading session than a new bull trend has started from 4718 and one can venture a bull trade of course with due stop.

On Stock Futures front SBI, Reliance, ICICI, Tata Motors & Tata Steel were fairly active contracts. Top gainers list included Escorts 7% DCHL 7% Adani Ent. 5% TTML 5% Reliance Cap 5%. Top losers in Futures segment were Bajaj Hind-4% NCC -4% Mc Dowell -4% IVRCL Infra -3% ONGC -3%

On Stock options front, SBI 2000CE Reliance 840CE SBI 1900PE SBI 1950 CE SBI 1900 CE were highly traded counters. Substantial increase in Open Interest of Nifty September Series was witnessed in 5200 CE (546050) 5300 CE (528950) 5000 PE (1465350)5100 PE (1898450) 5200 PE (1277350)4700 PE (521950) While reduction in Open Interest was seen in 4600 PE(-1446250) 4500 PE  (-472600) 4900 CE (-951200) 5000 CE (-408350) 5100 CE (-555550)

My prognosis of the market is we are again approaching crucial resistance zone. Open Interest figures does not enthuse me to take a bull call. But we are definitely in a watch mode. Breakout on upper side is possible as time wise we still have few trading sessions. My bias is still tilted towards shorting the market as nothing as such is confirming the bull case scenario. Watch technical levels very keenly & carefully.

Happy trading....

Atul Doshi

Derivatives Daily Update:19.09.2011

Derivatives Update:19.09.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5055	5063	5017.3	5037.15	-50.45
BANK NIFTY	29/09/2011	9655.55	9655.55	9526	9563.7	-139.75

On Price charts, Both the indices, NIfty & Bank Nifty ended 4 day rising streak and closed lower by 50.45 & 139.75 points than yesterday.

 

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	23788650	-177250	-10613250	-212265	-68658
NIFTY	25/10/2011	3310250	244050	-213000	-4260	-2976
NIFTY	24/11/2011	413250	23850	-64300	-1286	-461

On volume charts, Picture too was gloomy as can be seen from the above data that No. of trades, No.of contracts as well as traded quantity were substantially lower than yesterday. Even Open Interest data has nothing to indicate it was down by 177250 shares.

On technical charts, Nifty was not able to pull itself up. Lower participation coupled with lower volumes dragged Nifty lower vindicating that we are in downward trending market and trading in a range. Nifty is not able to break either side of support or resistance. As said earlier in several posts important Fibonaaci nos. are 4979 5116 5239 5362. Markets to have given a positive breakout can be said only when Nifty breaches 5362 level.

My opinion still remains that we are in a strong downward trending market and any rises should be used to short the market. Have patience and wait for breakouts.

Happy Trading...

Derivatives Daily Update:16.09.2011

Derivatives Update:16.09.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5124.7	5155	5071	5087.6	6.4
BANK NIFTY	29/09/2011	9739	9840	9593.6	9703.45	29.85

On price charts, Nifty September Futures opened at 5124.7, went up to 5155, made a low of 5071 and finally closed at 5081.20 slightly up by 6.40 points, making higher top higher bottom. Bank Nifty opened at 9739 went down to 9593.60 made a high of 9840 finally closing at 9703.40 up by 29.85 points.It too made a higher top higher bottom formation. Today was the fourth day in a row when both Indices managed to close above their previous day close.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	23965900	-447650	-1955950	-39119	-13703
NIFTY	25/10/2011	3066200	235750	21150	423	889
NIFTY	24/11/2011	389400	77200	59500	1190	328

On volume charts, as evident fro the above data, traded quantity, no.of contracts & no. of trades were all lower. Though markets managed to close higher, Open Interest has come down indicating that bears are covering their shorts and weaker bulls are in profit taking mode. Some built up is seen in October series as Open Interest is steadily rising.

On technical charts, as said earlier, Nifty has managed to close higher for the 4th consecutive day since it made a recent low of 4901 after falling from 5174 level. It is interesting to see that today also Nifty attempted to touch this important resistance level of 5175 but was not able to do so. Equally Nifty is not able  to break 4900 either making a trading range of 4900-5175. Important Fibonnacci Retracement levels are 4979, 5116 5239 & 5362. As said in yesterday's post, to end this bear phase Nifty is required to surpass this 5362 levels in coming few sessions. If it fails to do so, it can be fairly construed that we are in downward trending market and that this down trend is going to continue for long which might force Nifty to go and touch 4718 and if it breaks 4718 than we might see level of 4300-4500.

On stock future charts, Top counters were SBI, Tata Motors, ICICI, Reliance & ONGC. Counters which managed to gain were Financial Tech 10% NMDC 7%, NCC 7% Tata Motor DVR 6% and Jindal Saw 6%. Top counters which lost ground were India Cement -6% Hexaware -5% McDowell -5% Ambuja Cement -5% Srei Infra -5%.

On stock option charts, Active counters were SBI 2000 CE, Reliance 840 CE, SBI 1900 CE, SBI 1950 CE & SBI 1900 PE.

To conclude, in my opinion, till date we are not able to break resistance on upper side, volatility though has come down from its high, is still higher in the market, fast intra-day movements force bears to cover their shorts and restricts bull to become aggressive, making markets hollow and jittery. Any bad news in such situation will break the market more vehemently. My view is still tilted towards shorting the market till we see some meaningful breakout.

Happy Trading.

Atul Doshi

Derivatives Daily Update:15.09.2011

Derivatives Update:15.09.2011

 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5041	5100	4957.2	5081.2	62.05
BANK NIFTY	29/09/2011	9519	9740	9375	9673.6	194.35

On price charts, Nifty September futures has managed to close above its previous day's close for 3rd consecutive day. Today it crossed yesterday's high of 5032.8 with substantial margin and was not able to break yesterday's low of 4908. Nifty September future closed at 5081,20 up by 62.05 points.Similarly Bank Nifty too showed a strength and closed at 9673.60 gaining 194.35 points.

SYMBOL	EXPIRY	OPENINT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	24413550	-1368500	178850	3577	3127
NIFTY	25/10/2011	2830450	297900	-54150	-1083	-1911
NIFTY	24/11/2011	312200	11850	-4450	-89	-158

On Volume charts, Data reveals clearly that there was short covering in the market. Improvement in price coupled with increase in trading volumes and reduction in Open Interest by whooping 1368500 shares clearly indicates that shorts are getting covered as today also Bears were not able to break 4900 levels. Sensing the market mood, bears were in a buying spree taking markets to close higher than the previous day. Last 2 days show reduction in open Interest by nearly 24 lac Nifty futures. Though Open Interest is still higher by nearly 28 lac shares from the first day of current series.

On technical charts, this week till now we have seen Nifty trading in a range of 4900 -5100 but continuously  closing higher from corresponding previous session. On weekly basis, since Nifty made a low of 4718, It was making higher top higher bottom for preceding 2 weeks. In any case it is not able to clear resistance zone of 5175 to 5375. One interesting observation (refer to post 07.09.2011) is that, last down trend which started from 5760 and ended on 4718 took 34 sessions. From 4718 till date 12 sessions have passed. All the recent down trends corrected 61.8% retracement level in less than half time, in some cases even faster than that. Point that I am trying to make is that Nifty should retrace to 5362 which is 61.8% in another 5 sessions so as to concur with its earlier trend. If it fails to do so we might be in a major bear trend as it will prove that Nifty is not able to breach its major retracement level both price wise & time wise. 

On Stock futures chart, Active contracts by value parameter were SBI, RIL, INFY,LT,and AXIS. Top gainers list comprised of BGR Energy 15% TVS Motors 9% PFC 9% Patni 6% Tata Motor DVR 6%. While Contracts that lost ground were TTK Prestige -7% Srei Infra -6% Sun TV -4% KFA -4% DCHL -3%

On Stock Options chart, SBI 1900 CE SBI 1950 CE SBI 2000 CE SBI 1800 PE and RIL 840 CE were most active options.

My prognosis still remains that we are in downward trending market, All this up moves are mere gyrations & noises. All such up moves are the opportunity to short the market still we see any meaningful breakout. Any reversal in market need strong confirmation both on price as well as volume chart. Till now no such confirmation is forthcoming. As said earlier several times in several posts that we need to clear the resistance zone of 5175 5250 5375 pretty very fast to influence any change in a trend. 

Happy Trading...

Derivatives Daily Update:14.09.2011

Derivatives Update:14.09.2011

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4948	5032.8	4908	5019.15	77.55
BANKNIFTY	29/09/2011	9331.1	9508	9256.7	9479.25	137

On price charts, Nifty September Futures opened mildly above the previous close, made a low of 4908, bounced back to 5032.8 and finally closed at 5019.15 up by 77.55 points. Similarly Bank Nifty too opened mildly higher than previous close made a low of 9256.70, bounced back to 9508 finally closing at 9479.25 up by 137 points. Both the indices failed to breach Yesterday's high & low remaining within the range of Yesterday. It seems that traders are not willing to make any new commitments on either side making Nifty trade within the range.

SYMBOL	EXPIRY	OPENINT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	29/09/2011	25782050	-1029400	775600	15512	9779
NIFTY	25/10/2011	2532550	476500	71550	1431	2220
NIFTY	24/11/2011	300350	8650	-23100	-462	34

On Volume charts, As we can see that though traded quantity, No.of contracts and No. of trades were higher than yesterday, Open Interest came down by 1029400 shares. One can draw a fair assumption looking at the data that today's market witnessed some short covering. As Nifty was unable to break 4900 level decisively from last 3 days, Bears got scared and they covered their shorts. Though pull back was not that large to breach yesterday's high of 5040. Some steady increase in Open Interest in October series is seen from last few days.

On technical charts, It seems that we are trading in a range. Every attempt to break the range on either side is met with stiff resistance. We are still in downward trending markets as all traditional technical indicators like RSI, Stochastics, are trading below their averages and MACD, though has crossed its signal line, has started weakening. All this shows that no technical divergence is being witnessed yet in the market, though fair attempt is made to break this averages. Volatility index too is high making Nifty vulnerable to heavy & abrupt price movements. If Nifty now breaks 4900 level we will break down and possibly might test 4718 level. If Nifty manages to cross 5175-5375 level decisively with fair volumes and sustains above that for few days, we can safely assume that medium term uptrend has started. In that case level of 4900 from where it has retraced back 3 times,  level of 4835 which is 200 week's moving average & 4718 recent low can be good supports for initiating longs.

On Stock Futures charts, SBI, RIL, INFY, ICICI, & Axis BAnk were top traded shares on volume parameter. Top Gainers list included Triveni 8% DCHL 7% Hexaware 7% Educomp 7% JPAssociates 7% while Top Losers were GTL -10% Pantaloon -7% Opto Circuits -4% CESC -4% & Guj Fluoro -3%

On Stock Option charts, SBI 1900 CE, SBI 1800 PE, RIL 820 CE, RIl 840 CE & INFY 2300 CE were most active counters.

To conclude, we are trading in a broad range and in the process trying to make some good support & resistance for longer term trend. Data till now is tilted in favour of Bears. So it is advisable to respect the markets & trade accordingly. Any reversal in trend requires strong confirmation on price charts and till we see that happening, trade short in the markets with respective stops.

Happy trading.