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