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