Derivatives Update:14.09.2011
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.
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.
| 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.
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