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