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