Derivatives Daily Update: 31.10.2011

Day of Sideways Move: 31.10.2011

Nifty November Futures closed at 5347.10 down by 38.4 points and Bank Nifty  Futures closed at 10016.70 up by 56.80 points. Activity was largely subdued as traded volumes in Nifty Futures were lower than yesterday, on the contrary Bank Nifty attracted better volumes as they were higher than yesterday. Open Interest picture too was dismal as it was marginally up by 2.60 lac shares in Nifty Futuresand was lower by 85 k in Bank Nifty Futures. Put Call Ratio too came down at 1.08 lower than yesterday as Put writers were bit weary in the market to write puts.

Individual Stock Futures which attracted higher volumes were SBIN, ICICIBANK, HINDUNILVR, MARUTI, TATASTEEL. Top gainers were VIJAYABANK 9% HINDUNILVR 7% INDIANBANK 6% DENABANK 6% and UCOBANK 6%. top losers were GITANJALI -5% ORIENTBANK -5% HINDALCO -4% STER -4% TATAMOTORS -4%.

Individual Stock Options which attracted higher activity were HINDUNILVR 380 CE, ICICIBANK 940 CE, ICICIBANK 960 CE, SBIN 2000 CE, RELIANCE 900 CE.

Nifty Option Series where Positive change in Open Interest was seen were,5400 CE (8 lac) 5500 CE (8 lac) 4400 PE (4 lac) 5200 PE (7lac) 5300 PE (5 lac) Open Interest of Out of the Money Put Option was 3.50 Cr and Call Option was 1.5 Cr. Open Interest of In the Money Put Option was 34 lac and Call option was 1.05 Cr.

In conclusion, looking to today's sideways movement, I would like to stick to my opinion which I expressed in yesterday's post. my view on long term basis is still bearish but in short term you have an opportunity to make some bucks by buying with strict stop loss as long as Nifty remains above 5240. But in my opinion, still big money can be made by shorting the Nifty with stop above 5500.(for details on which I have based my opinion, refer to yesterday's post.)


Happy Trading, 


Atul Doshi

Derivatives Daily Update: 28.10.2011

Samvat 2068 Opens with Bang: 28.10.2011

Nifty November Futures closed up by 153 points at 5385.50 and Bank Nifty futures too closed up by 379 points up at 9959.90. Though trading data is nor comparable with yesterday, as Mahurat session was of only 1.15 hr, Open Interest in Nifty November Futures stood at 2.78 Cr up by nearly 11 lac shares.

Total turnover of FO segment was 95k Cr and no.of contracts traded were 36.37 lac. Put Call ratio stood at 1.23. Volatility as measured bu India VIX was at 21 drastically down by 7%.

Individual stock futures which performed better on volume parameter were SBIN, ICICIBANK, HINDALCO, RELIANCE & INFY. Top gainers were HINDALCO 11% JSWSTEEL 10% MOSER 9% IVRCL 9% GTOFFSHORE 8%. Top losers were GITANJALI -4% BPCL -3% JUBIFOOD -2% TTK -2% AREVA -2%.

Individual stock options which attracted higher activity were RELIANCE 900 CE SBIN 2000 CE HINDALCO 140 CE SBIN 1900 CE & ICICIBANK 900 CE

Nifty options series where Open Interest increased were 5400 CE (4 lac) 5500 CE (15 lac) 5600 CE (11 lac) 5700 CE (5 lac) 4900 PE (9 lac) 5200 PE (12 lac) 5300 PE ( 24 lac) 5400 PE (11 lac) 5500 PE (5 lac). Nifty options series where Open Interest decreased were 5100 CE (-3 lac) 5200 CE (-5 lac) 5300 CE (-4 lac) 4500 PE (-2 lac) 4600 PE (-4 lac) 4700 PE (-7 lac)

Observation of price behavior on charts shows that Nifty after crossing psychological level of 5175 has consistently opened up with gap  on 2 days and filled up the gap of 5337-5191 with the same vengeance and style. It has even closed above the major resistance area of 5240 -5360, both important Fibonacci nos.which I was talking about in earlier posts. Price wise it has corrected 61.8% of fall from 5760 to 4718 but time wise it has taken longer time to correct the trend compare to earlier similar cases. All earlier retracements took half the time to correct the trend but this time it took more time to correct the down trend which leads us to doubt the sustainability of up move and makes us believe that this rally is corrective and will soon fizzle out. Secondly all the falls from 6349 levels were corrected by nearly 61.8% or some time even more but ended lower than previous top. Just to give you an example fall from 6349 to 5728 was corrected up to 6210 level but was unable to surpass 6349. Similarly fall from 6210 level to 5175 was corrected up to 6000 level but was not able to surpass 6210. So if we believe in this observation, this time fall from 5760 level to 4718 has corrected up to 5385 till date but will not surpass 5760. But for extremely short term trader since it has crossed 5360, one can buy with stop below 5240 with a price objective of 5470 as it is the downward sloping trend line joining earlier 2 tops. To cut it short, my view on long term basis is still bearish but in short term you have an opportunity to make some bucks by buying with strict stop loss.

Happy Trading

Atul Doshi.

Derivatives Daily Update: 26.10.2011

Mahurat Day: 26.10.2011

Happy Diwali to one and all. May God bless you all wonderful health and enormous wealth.

Today was a Mahurat Day, a session of just 1.15 hr. Prices of both indices closed marginally higher than yesterday. Though Open Interest of November Nifty Futures was up by 6 lac shares approx.

Nifty has closed above its psycholigical resistance of 5175 level for 2 consecutive days. It has entered in to stiff restiance zone of 5240- 5360. Days ahead will have potential to decide future trend, Let us watch how markets perform in full trading session on 28.10.2011. Till then....

Once again a Happy Diwali & Wish You Very Very Prosperous New Year.

Happy Trading..

Atul Doshi

Derivatives Daily Update: 25.10.2011

Smart Expiry: 25.10.2011

Happy Diwali

On price front Nifty October Futures opened at 5129.70, went down to 5086.65, made a high of 5192.85 and finally closed at 5191.60. Bank Nifty opened at 9703, went down to 9325.05, made a high of 9890 and closed at 9511.60. Banks were particularly weaker as reflected by Bank Nifty.
 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5129.7	5192.85	5086.65	5191.6	85.8
BANK NIFTY	29/09/2011	9703	9890	9325.05	9511.6	-141.95

On volume front, total no. of contracts traded were 97.88 lac and total turnover recorded was 2.49 lac Cr, much much higher than yesterday. Put Call ratio was 0.89 and volatility as measured by India VIX came down by 12% to 22.31. Traded quantity, no.of contracts and no. of trades of Nifty Futures across all the series were hugely up from yesterday's level. Even Open Interest was hugely up by whooping 6169050 shares. 

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	6737350	-2856250	5389500	107790	11645
NIFTY	24/11/2011	26186250	8891850	10704150	214083	66642
NIFTY	29/12/2011	1196150	133450	241900	4838	2270
TOTAL		34119750	6169050	16335550	326711	80557

On stock futures front heavily trade counters were SBIN, RELIANCE, ICICI, LT, AXIS. Top gainers list included HOTELEELA 14% YESBANK 9%, STRTECH 9% JINDALSAW 7% and JPPOWE 7%. Top loser were DCHL -12% MOSERBAER -10% VIPIND -7% TULIP -6% TITAN -5%.

On stock option front, actively traded counters on volume parameter were SBIN 1900 CE, SBIN 1850 PE, RELIANCE 860 CE, SBIN 1850 CE, SBIN 1950 CE,

On nifty options front, increase in open interest was seen in 5200 CE (3385700) 5300 CE (214350) 5000 PE (2547400) 5100 PE (1805950). Decrease in open interest was seen in 5000 PE (-1617600) 5100 PE (-2694150) 5500 CE (-194150) 4700 PE (-424950) 4800 PE (-317100) 4900 PE (-376300) 5200 PE (-1312950).

On technical charts, the much resisted level of 5175 was breached today. As said in earlier posts there was nothing sacrosanct about this level except the fact that  it acted as stiff support when market was in uptrend and when it broke this level it acted as stiff resistance. Real test is 5240 which is 50% retracement level of bear trend(5760-4718) and 5360 which is 61.8% retracement of the bear trend(5760-4718). Yesterday's momentum both price wise & volume wise if sustained in coming days we might be able to visit 5240 & even 5360.

In nutshell, Firstly it is early to draw any conclusion from 1 day's price movement and secondly we are truly entering in to major resistance zone of 5240 -5360. If this congestion area is breached with same kind of momentum as we saw today chances are there that we may have entered in to bull trend once again and in that case every dip in price will warrant a buy. But till the time we are below this levels, in my view we are in bear grip and every rise in price till this level warrants a sell. Trade cautiously with adequate stops.

Happy Diwali and Happy New Year to one and all.

Happy Trading Of-course,

Atul Doshi

Derivatives Daily Update: 24.10.2011

Listless Day: 24.10.2011

On price front, Nifty October Futures opened up at 5130.35, made a high of 5157.35, made a low of 5092.70 and finally closed at 5105.80 up by 51.80 points. Bank Nifty too opened high at 9799.70 made a high of 9928.25, made a low of 9607.40 and closed at 9653.55 down marginally by 33.50 points. It was a low trade day moving in a very narrow band.
 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5130.1	5157.35	5092.7	5105.8	51.8
BANK NIFTY	29/09/2011	9799.7	9928.25	9607.4	9653.55	-33.5

On volume front, total no. of contracts traded were 59,32 lac and total turnover was 1.50 lac Cr more or less same as yesterday. put Call ratio stood at 1 and volatility as measured by India VIX was 25.22 down by merely 1%. Total traded quantity, no of contracts and no.of trades of Nifty across all series were less than yesterday though Open Interest saw a rise of 732550 shares.
 

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	9593600	-3678700	-2939250	-58785	-23676
NIFTY	24/11/2011	17294400	4356300	1270300	25406	13603
NIFTY	29/12/2011	1062700	54950	28850	577	388
	TOTAL	27950700	732550	-1640100	-32802	-9685

On stock futures front, actively traded counters were SBIN, TATASTEEL, LT, RELIANCE and ICICIBANK. Top gainers were POLARIS  8%, TATAMOTORS 5% PRAJIND 5% MUNDRAPORT 4% TULIP 4%. Top losers were WELCORP -7% JAINIRRIGATION -5% ORIENTBANK -5% MRPL -5% PATELENG -4%.

On stock options front, actively traded counters were SBIN 2000 CE, SBIN 1950 CE, SBIN 1900 CE, RELIANCE 860 CE LT 1300 PE.

On nifty options front, positive change in open interest was seen in 5200 CE (836350) 5100 PE (303350) 5200 PE (861000). Negative change in open interest was seen in 5000 CE (-897700) 5100 CE (-652800) 5300 CE (-472800) 5400 CE (-151900) 4600 PE (-295000) 4800 PE (-134700) 4900 PE (-277050) Open Interest in Out of the Money call Option was 2.35 Cr shares and Put Option was 5.03 Cr shares. Open Interest in In the Money Call Option was 97.12 lac shares and Put Option was 30 lac shares.

On technical front, behavior of Nifty is extremely cautious and range bound, Today also it failed to surpass 5175 level. Formation of rounding top is bit worrisome. Supply is witnessed at higher level which restricts Nifty's upward movement. Similarly it is taking support at its short term to medium term moving averages which are placed in the region of 4975-5075 levels.

In nutshell in my opinion, we are still in downward trending market and possible  breakout of range on lower side is very much possible. Even if it breaks so called resistance level of 5175, level of 5240 & 5362 are sacrosanct level which are not easily breakable. Tomorrow is last day of this expiry and even RBI Policy is scheduled for tomorrow. Resolution of Euro Crisis is also on anvil. Therefore huge volatility is expected. If you are a day trader please keep strict stop losses and watch for possible breakouts. Positional trader needs to watch market movement very closely and act only if trend reversal or trend continuation is confirmed.

Happy Trading..

Atul Doshi.

Derivatives Daily Update: 21.10.2011

A Sweeping Down Day: 21.10.2011.


On price chart, Nifty October futures opened at 5102, made a high of 5131.40 went straight down to 5038.60 and finally closed at 5054 down by 48.85 points. Bank Nifty too followed downward trend, opened at 9783 went up to 9826 drifted down to 9665 and finally closed at 9687.05 down bu 85.70 points.

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	5102	5131.4	5038.6	5054	-48.85
BANK NIFTY	29/09/2011	9783	9826	9665	9687.05	-85.7

On volume chart, total no.of contracts traded were58.86 lac and total turnover was 1.50 lac Cr both down from yesterday's level. Put Call ratio was 0.93 and volatility as measured by India VIX stood at 26.3 up by 3 %. Traded quantity and no,of contracts traded were higher than yesterday on net basis across all series though no.of trades were lower than yesterday. Open Interest was up by 1491500 on net basis across all series.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	13272300	-3217250	-1469300	-29386	-18496
NIFTY	24/11/2011	12938100	4655400	3592950	71859	5126
NIFTY	29/12/2011	1007750	53350	-48800	-976	-575
	TOTAL	27218150	1491500	2074850	41497	-13945

On stock futures front, top traded shares were LT, SBIN, JSWSTEEL, RELIANCE and ICICIBANK. Top gainers were MOSERBAER 8% RAYMOND 8% TULIP 5% CHAMBLFERT 3% BRFL 2%. Top losers were POLARIS -6% JAINIRRIGATION -5% ASIAN PAINT -5% STERTECH -4% ONMOBILE -4%.

On stock options front actively traded shares were LT 1400 CE, LT 1450 CE, LT 1350 PE, SBIN 2000 CE, SBIN 1950 CE.

On Nifty options front, positive change in open interest was seen in 5000 CE (499050) 5100 CE(767350) 5200 CE (476200) 4800 PE (316450) 5000 PE (231550). Negative change in open interest was seen in 5300 CE (-185400) 5100 PE (-482800) 5200 PE (-280350). Open Interest in Out of the Money Call Option was 3.03 Cr shares and of Put Option was 4.87 Cr. Open Interest of In the Money Call Option was 61.62 lac shares and of Put Option was 66.89 lac shares.

On technical side, behavior of nifty is absolutely range bound. Today it has breached its extremely short term moving average of 5077 (10 days)on down side but it is still above its 20 day and 50 day moving average of 4983 and 5000 respectively. For extremely short term trader one can buy with stops placed below 4975 level.

In conclusion, my bias is still towards Nifty going down as there are many headwinds on price level that Nifty needs to cross. Major events both domestically & internationally are in near future which has a potential to influence price movements. Domestically RBI Policy, Expiry of current series and internationally solution to Euro Region Problems will have  effect on prices more in a current scenario where markets have become extremely range bound indicating confused state of mind of traders. So watch the price levels very carefully as coming few days can change the course of the market for longer period of time.

Happy Trading

Atul Doshi.

Note: If you are happy or unhappy with analysis please leave your comment. It will be taken with admiration.

Derivatives Daily Update: 20.10.2011

A Down Day: 20.10.2011

On price charts, nifty opened lower at 5098, drifted all the way down to 5033.20, bounced back to 5111 and closed at 5102.85 down by 46.55 points. Bank nifty too opened lower at 9785, drifted down to 9611.65, bounced back to 9794.40 and finally closed at 9856.35 down by 83.60 points. Both the indices made lower top lower bottom.

On volume charts, total no. of contracts traded were 63.29 lac and total turnover recorded was 1.59 lac Cr. both up from yesterday's level, thanks partly to shifting of positions from current series to new series. Put call ratio was at 1.04 and volatility as measured by India VIX was ruling at 25.60 up by nearly 7% from yesterday's level. Traded quantity, no. of contracts as well as no.of trades were all higher than yesterday. Open interest across all the series on net basis was marginally up by 192000 shares.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	16489550	-1770650	3800750	76015	25265
NIFTY	24/11/2011	8282700	1881200	1045700	20914	14461
NIFTY	29/12/2011	954400	81450	39550	791	548
	TOTAL	25726650	192000	4886000	97720	40274

On stock futures front, top traded counters on volume parameter were SBIN, ICICIBANK, TATASTEEL, RELIANCE and DLF. Top gainers were MOSERBAER 7%, RAYMOND 3%, TRIVENI 3%, BOMDYEING 3% and BFUTILITIES 2%. Top losers were EXIDEIND -8%, LICHOUSING -6%, SREIINFRA -6%, HDFC -4% and IRBINFRA -4%.

On stock options front heavily traded series were SBIN 1950 CE, SBIN 1900 CE, SBIN 2000 CE, RELIANCE 840 CE and SBIN 1900 PE.

On nifty options front, positive change in open interest was seen in 5000 CE (1206250) 5100 CE (1575200) 5200 CE (1670700) 5300 CE (177650) 4500 PE (1376100) 4700 PE (132000) 4800 PE (277500) 5100 PE (124550). No substantial negative change in open interest was seen in any series. Open interest in Out of the Money Put Options was 5.42 Cr shares. and Call Options was 2.40 Cr shares. Open interest in In the Money Put Options was 31.42 lac and call option was 1.16 Cr shares.

On technical charts, movement in nifty is absolutely range bound. It is taking support at moving averages and feels pressure near 5175 level. from the last gap down (5337-5191) on 05.08.2011 till date it is trading in a broad range of 5200-4700. In this period it has attempted to breach 5175 level thrice and 4718 level twice but has failed to do so. Once it is able to do so momentum on that side might be seen in the market.

In nutshell, my view still remains bearish for longer term trading. Nifty should have corrected 61.8% of fall long before but it failed to do so. Even if nifty was to correct to 5362, 61.8% of fall (5760-4718), time-wise it has failed to do so. Hence level of 5362 even reached will be very vulnerable and difficult to sustain. even after reaching 5362 level chance of revisiting recent low of 4718 still exists on chart. But for now watch the range very carefully, wait for breakout and than participate on side of momentum. For short term trader buy near 5000 level and sell around 5150 level with strict stop loss.

Happy trading

Atul Doshi

Note: If you like or dislike the post please feel free to leave your comment.

Derivatives Daily Update: 19.10.2011

Smart Up Day: 19.10.2011

On price front, today nifty october futures opened strong at 5070, didn't go below 5070, made a high of 5157.50 and closed at 5149.40 smartly up by 104.50 points. Bank nifty too opened high at 9655, went down top 9639.90 made a high of 9877 and finally closed at 9856.35 up by whooping 277.25 points. Strength was seen in nifty as it opened higher than yesterday's high and didn't go below it for a whole day.

On volume front, total turnover during the day was 1.38 lac Cr and no. of contracts were 54.34 lac both higher than yesterday. Put call ratio was at 1.13 and volatility as measured by India VIX was 24.05 down by 7%. Some of the higher volume may be attributed to shifting in open positions from current series to new ones. Traded quantity and no. of contracts across all the series were higher than yesterday. No.of trades were lower than yesterday. Open Interest on net basis across all three open series was higher by 1272800 shares indicating some mopping up of positions by Bulls. Increase in open interest coupled with rising volumes is considered to be positive.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	18260200	-1196900	163700	3274	-7543
NIFTY	24/11/2011	6401500	2439900	1699850	33997	3496
NIFTY	29/12/2011	872950	29800	-209150	-4183	-198
	TOTAL	25534650	1272800	1654400	33088	-4245

On stock futures front, heavily traded counters on volume parameter were SBIN, ICICIBANK, TATASTEEL, CROMPTONGREAVES and LT. Top gainers list included MOSERBAER 12%, ABB 7%, BOMDYEING 6%, GMDC 5% and NEYYVELLI 5%. Top losers were CROMPTONGREAVES -13%, SESAGOA -3% PATNI -2% ONMOBILE -2% and EXIDE -2%.

On stock options front, active counters were LT 1400 CE, RELIANCE 840 CE, SBIN 1900 CE, SBIN 1950 CE, SBIN 2000 CE.

On nifty options front, positive change in open interest was seen in 5200 CE (485400) 5300 CE (635100) 5400 CE (225350) 4800 PE (306250) 4900 PE (848700) 5000 PE (521500) 5100 PE (2488050) 5200 PE (606350). Negative change in open interest was seen in 4900 CE (-156300) 5000 CE (-1007750) 5100 CE (-448900) 4600 PE(-287150) 4700 P3 (-298550). Out of the Monet Put Option Open Interest was 5.39 Cr shares and Call Option was 2.26 Cr shares. Open Interest of In the Money Put Option was 34 lac shares and Call option was 98 lac shares.

On technical charts, today was an absolute up day but has remained within the larger band. On down side nifty is taking support at its short term to medium term moving averages and on upper side it is not able to surpass 5175 level. Expiry is approaching near and shifting of positions are taking place. Volatility has come down to 24 levels much lower than the start of the series which was ruling around 33 levels. Some stability is returning to the markets. Some short of wedge has formed between 5225 and 4725 levels. Once we break this wedge formation some meaning movement in price will be witnessed.

In conclusion, today's price movement and this week's price movement compel me to change my bearish stance. On weekly charts if we observe this is 3rd week in progress which has made higher top higher bottom from the low of 4725. Though I am still bearish and not in a mood to change my bearish view. I am waiting for the break out above 5240 and 5360. I feel that this are the levels where we will see good amount of supply. If markets fail to digest this supply we might be headed lower and this entire rally from 4700 level to current level will be considered pull back of larger bear trend. We are nearing inflection point and hence it becomes imperative that we trade cautiously. Don't be shy of squaring off your losing positions at stop loss if you want to trade longer.

Happy Trading

Atul Doshi.

Derivatives Daily Update: 18.10.2011

Down & Weak Day: 18.10.2011

On price front, Nifty October Futures opened weak at 5053, hardly made a high of 5063.30, drifted down under selling pressure to 5013.30 and finally closed at 5044.90 down by 70.95 points. Bank Nifty too performed similarly by opening at 9685 didn't even move higher than open price, drifted down to 9481.50 finally closed at 9579.10 down by 123 points.

On volume front, total turnover was 1.22 lac Cr and total no.of contracts traded were 48.76 lac, both higher than yesterday's figure. Put Call Ratio was at 1.12 and Volatility as measured by India VIX was higher at 25.90. Trading volumes were higher in all the three series though on net basis change in open interest was miniscule and nothing to write about.
 

EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
25/10/2011	19457100	-1709500	2094250	41885	10509
24/11/2011	3961600	1289600	1381200	27624	7618
29/12/2011	843150	251450	266550	5331	1162
TOTAL	24261850	-168450	3742000	74840	19289

On stock futures front, actively traded counter on volume parameter were TCS, SBIN, ICICIBANK, TATAMOTORS & TATASTEEL. Top gainers list included PATNI 15% KFA 7% GMDC 7% WELCORP 3% COALINDIA 3%. Top losers list comprised of CHAMBALFERTI -16%, HCLTECH -9%, TCS -7%, MOSERBAER -6% & POLARIS -6%.

On stock options front active counters were SBIN 1900 CE, RELIANCE 840 CE, TCS 1100 CE, RELIANCE 820 CE, PETRONET 170 CE.

On nifty options front, positive change in open interest was seen in 5000 CE(707350) 4900 PE (394600). Negative change in open interest was seen in 5300 CE (-339700) 5400 CE(-283850) 4800 PE(-503100) 5100 PE(-1185600) 5200 PE (-326250). Open Interest of In The Money Put Option was 58.71 lac shares and Call Option was 65.89 lac shares. Open Interest in Out of The Money Put Option was 4.87 Cr shares while Call Option was 2.70 Cr shares.

On technical front, one single observation is Nifty is finding a good resistance and supply of shares at higher levels and is not able to surpass not-so-sacrosanct 5175 level. Similarly it is taking support at its medium term moving average(50 days) of 5015. Today also it has seen some buying or short covering at 5015 levels. In coming days whether this averages between 4930 -5030 will be held or not needs to be watched carefully. Markets have become extremely range bound between 5000 -5175. But with the kind of volatility in markets such band can not be held for too long. Breakout is imminent. Till that time trade the range if you can or wait for breakout.

At the end of the day, If I have to stick my neck out and opine than my stance still would be bearish. Nothing on the charts till suggest trend reversal. Advise is to go short on Nifty with adequate stop loss unless some meaningful breakout above 5250 & 5360 is visible.

Happy Trading

Atul Doshi.

Derivatives Daily Update: 17.10.2011

Lackluster Day: 17.10.2011

On price front, it was listless day. Nifty October Futures opening higher at 5161 taking clues from overseas markets just made a high of 5162, drifted gradually down to 5081 and closed at 5115.85 down by 27.50 points. Bank Nifty too opened higher at 9701.10 made a high of 9788 drifted down to 9656 and closed at 9702.10 up marginally by 28.05 points.

On volume front too, picture was dismal. No.of contracts traded were 42.56 lac & Total Turnover was 1.08 lac Cr., both down from yesterday's level. Put Call Ratio was 1.09 and Volatility as measured by India VIX too was ruling at 25.48. On a day of downward price movement, Open Interest in Nifty of all series has improved by 695150 indicating some shorts being created in markets. Traded volumes were lower than yesterday.
 

EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
25/10/2011	21166600	460900	-3385600	-67712	-17705
24/11/2011	2672000	172650	195900	3918	1842
29/12/2011	591700	61600	13850	277	-104
TOTAL	24430300	695150	-3175850	-63517	-15967

On Stock Futures front, most active counters were SBIN, TATMOTORS, RELIANCE, ICICIBANK, AXISBANK. Top gainers were JPPOWER 5% PETRONET 5% CROMPTON GREAVES 5% BALRAMCHINI 5% TATAMOTORS 4%. Top losers were WELCORP -6%, IVRCL -5%, JINDALSAW -5%, RELIANCE -4%, RELIANCECAP -4%.

On Stock Options front active series were RELIANCE 860 CE, RELIANCE 840 PE, RELIANCE 900 CE, RELIANCE 880 CE, SBIN 1900 CE.

On Nifty Options front, positive change in open interest was seen in 5100 CE (1269500) 5200 CE (1069150) 5300 CE (601700) 5500 CE (238200) 4300 PE (298350) 4500 PE(196950) 5100 PE(121650) while negative change in open interest was seen in 4900 PE(-294600).

On technical front, once again we have witnessed weakness in the markets. Nifty is not able to cross 5175 level. Let me make it clear that there is nothing sacrosanct about 5175 level except the fact that this level acted as major support in bull trend and once it broke it is acting as stiff resistance level.

In conclusion, as said in several other posts, my view in Nifty is still bearish. Unless and until Nifty breaks 5240 & 5360 level decisively, in my opinion money can be made by shorting the Nifty. Though for extremely short term trader 4975- 5030 level might act as immediate support. With this stop loss one can go long to achieve a price target of 5240.

Happy Trading

Atul Doshi

Derivatives Daily Update: 14.10.2011

A Rising Day: 14.10.2011

On price front, it was clearly a up day. Nifty October Futures opened at 5060 barely made a low of 5056 went up to 5153.70 and finally closed at 5143.35 up by 69.30 points. Bank Nifty too followed the trend opened at 9532.05 made a low of 9485 went straight up to 9699 and finally closed at 9674.05 up by 121.70 points.

On volume front, it was not a good picture. Total turnover in FO segment was 1.12 lac Cr and no.of contracts were 44.55 lac lower than yesterday's figures. Traded quantity, no.of contracts and no. of trades were all down. Even Open Interest figures were not at all inspiring. Only soothing point was that volatility as measured by India VIX was ruling at 26 much lower than yesterday. Put to Call Ratio of Options was at 1.14.
 

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	20705700	-170500	-1526600	-30532	-14708
NIFTY	24/11/2011	2499350	302950	51450	1029	41
NIFTY	29/12/2011	530100	41350	-6150	-123	-131

On stock futures front, most actively traded counters were SBIN, RELIANCE, INFY, TCS and TATASTEEL. Top gainers were UNPHOS 8%, ARVIND 7%, TRIVENI 7%, POLARIS 7%, BALRAMCHINI 6%. Top losers were KFA -7%, SESAGOA -4%, MCDOWELL -4%, TATASTEEL -4%, IGL -3%.

On stock options front, heavily traded contracts were RELIANCE 860 CE, RELIANCE 900 CE, RELIANCE 880 CE, SBIN 1900 CE, RELIANCE 840 PE.

On nifty options front, positive change in open interest was seen in 5300 CE (357950) 5400 CE (692450) 4800 PE (837000) 4900 PE (295700) 5000 PE (1284150) 5100 PE (1507700) 5200 PE (478200). Negative change in open interest was seen in 4800 CE (310000) 4900 CE (348800) 5000 CE (416850) 5100 CE(626550) 4700 PE(568500). Out of the Money Put Option open interest was 5.48 Cr shares and Call Option was 2.16 Cr. In the Money Put Option open interest was 34.62 lac shares and Call Option was 1.11 Cr shares.

On technical front as can be seen from the price movements that Nifty has made some trading bottom around 4940-5030 range which even coincides with its short term to medium term moving averages. For extremely short term bull traders this can be considered as exit level. Bull trade initiated at current level has a potential to earn a price level of 5240 once it crosses 5175.

My prognosis still remains bearish for longer term. Nifty needs to decisively surpass 5240 which is 50% retracement level of bear trend (5760-4718) and 5360 which is 61.8 % retracement level of bear trend (5760-4718) and trade above that for few sessions. Unless it does so, in my opinion, opportunity to make money lies in going short on Nifty.

Happy Trading

Atul Doshi

Derivatives Daily Update: 13.10.2011

A Listless Day: 13.10.2011

On price front, Nifty October futures opened strong at 5135 barely made a high of 5140, drifted all the way down to 5066.10 and finally closed at 5112.85 down by 38.80 points. Bank Nifty showed some resilience by opening strong at 9600.55 made a high of 9665, went down to 9525.10 and finally closed at 9552.35 up by 52.60 points. Both the indices made higher top higher bottom. But overall markets remained listless.

On volume front, total turnover in FO segment was 1.22 lac Cr and no.of contracts were 48.45 lac shares. Put Call Ratio was 1.23 up from yesterday's level of 1.09. Volatility as measured by India VIX was ruling fairly stable at 28.24. Nifty October futures traded quantity, no.of contracts traded and no. of trades were all lower than yesterday. Even Open Interest fell considerably by 1084500 shares.

On stock futures front, actively traded counter on volume parameter were SBIN, ICICIBANK, RELIANCE INFY and TATASTEEL. Top gainers during the day were KFA 11% DCB 7% HOTEL LEELA  6% ADANI POWER 6% ESCORTS 5%. Top losers were WELCORP -5% JINDAL STEIL -5% PANTALOON RET -4% SINTEX -4% PRAJ IND -4%

On stock options front, SBIN 1900 CE, SBIN 2000 CE, SBIN 1950 CE, RELIANCE 860 CE & SBIN 1900 PE.

On Nifty options front, positive change in open interest was seen in 5100 CE (1024800) 5200 CE(957300) 5300 CE(826150) 5400 CE (136000) 5500 CE (206050) 4700 PE (833900) 4800 PE (479100) 5000 PE(395350). Negative change in open interest was seen in 4900 CE (-190650) 5000 CE (-164250) 4400 PE (-161850) 4500 PE (-190800) 4600 PE (-1601400)

On technical charts Nifty Futures was not able to surpass the major resistance zone of 5175. Yesterday's activity showed that we might be able to take out that level but today supply came much before that level and Nifty October futures after opening pretty strong at 5135 barely made a high of 5140 and drifted down to 5066 level. Though Nifty has still closed above its short term to medium term moving averages giving us a hope that it will once again try to breach that level. Extremely short term trading bottom is 4978. One who wants to venture a bull trade can do so with stop at 4975 level.

Finally I may conclude by saying that today was a lackluster day. Traction that we saw in yesterday's rally fizzled out today. As said earlier in this post volumes were lower than yesterday and built up that we saw yesterday in Open Interest was almost nullified today. Bulls are skeptical about sustainability of upward price movements. Extremely short term view can be to buy current level with Stop loss of 4975. Long term markets are still bearish and for a trader with slightly medium to longer term view advise is to venture a short with stop above 5240.

Happy Trading

Atul Doshi

Derivatives Daily Update: 12.10.2011

Smart Up Day: 12.10.2011

On price chart Nifty October Future opened at 5010, made a low of 5001, smartly moved up to 5118.95 and finally closed at 5112.85 up by 130.40 points. Bank Nifty Future opened at 9250 made a low of 9185 smartly moved up to 9538 finally closed at 9499.75 up by 323.35 points.

On volume charts, Total turnover was 1.4 lac Cr, No.of contracts traded were 55.65 lac. Both total turnover and no.of contracts were higher than yesterday.Put Call Ratio was 1.09 lower than yesterday. Volatility as measured by India VIX was at 28.5 lower than yesterday. Traded quantity, no.of contracts traded and no.of trades were substantially higher than yesterday. Open Interest  too was higher by 997200. For the first time on volume charts, there is an indication of Bulls returning to the market. Today rise in price is accompanied by rise in volumes as well as open interest.

EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
25/10/2011	21960700	997200	7452350	149047	40630
24/11/2011	1931050	284850	189400	3788	1472
29/12/2011	439200	71850	15500	310	-20

On technical charts, Nifty has managed to surpass its short term moving averages of 4914 & 4962 (10 & 20 days) as well as medium term moving average of 5046 (50 days) on daily charts. Though long term trend remain bearish, opportunity of buying with stop loss of above mentioned averages has emerged for Bull trader in short term. Pull Back rally of bigger Bear trend might extend to level of 5240 and than 5362 once it crosses 5175 level.

On stock futures front, active counters on volume parameter were SBIN, INFY, ICICIBANK, RELIANCE and TATAMOTORS. Top gainers were JUBILANT FOOD 10% HEXAWARE 7% INFY 7% SBIN 7% PRAJ 6%. Top losers were SUNTV -4% COAL INDIA -3% BAJAJ HIND -2% RUCHISOYA -2% TATAPOWER -1%.

On stock options front, heavy activity was seen inSBIN 1800 CE, INFY 2500 PE, INFY 2700 CE, SBIN 1850 CE and INFY 2600 CE.

On Nifty options front, Positive change in Open Interest was seen in 5300 CE (787100) 5400 CE (500950) 4600 PE (1160550) 4700 PE (577800) 4800 PE (483250) 4900 PE (1294250) 5000 PE (1893850) 5100 PE (1809150) 5200 PE (302450). Negative change in Open Interest was seen in 4800 CE (-223050) 4900 CE (-203350) 5000 CE (-943300) 5100 CE (-479950) 5200 CE (-469500). Out of the Money Put Options were 5.50 Cr and Call Options were 1.89 Cr. In the Money Put Options were 60.26 lac. and Call Options were 1.33 Cr.

My analysis of today's data shows that for the first time since long Nifty has managed to cross its short term as well as medium term moving averages on a day when all the three things price, volume and open interest has gone up. It clearly indicates participation has returned back. It is important to see in coming days that today's move is sustainable or not. In short term it has cleared some resistance zone. Long term view still remains bearish and today's move is part of correction of larger bear trend. Bears once again attack  the markets at higher levels or not needs to be watched in coming sessions. Till that time watch the screen and see that trading range of 4718-5175 on higher side is breached or not.

Happy Trading

Atul Doshi

Derivatives Daily Update: 11.10.2011

Lackluster Day: 11.10.2011

On price charts, Nifty October Futures opened strong at 5028.90 taking clues from international markets, went up to 5055, could not sustain further, came down to 4970 and finally closed at 4982.45 marginally down by 10.85 points. Bank Nifty Futures too opened strong at 9275, went  up to 9373, drifted down to as low as 9140 and finally closed at 9176.40 down by just 13.85 points. It was absolute listless day as far as price activity is concerned.

On volume charts, Total no.of contracts traded were 41.96 lac and Total turnover was 1.04 Cr marginally up from yesterday's level. Put Call Ratio almost remained flat at 1.18. As far as Nifty futures is concerned traded quantity and  no. of contracts traded were lower for October series though no. of trades were marginally higher. Again change in Open Interest was at miniscule level and nothing to write about. Volatility as measured by India VIX was ruling at 30 levels.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	20963500	125000	-395150	-7903	3562
NIFTY	24/11/2011	1646200	175550	45350	907	1145
NIFTY	29/12/2011	367350	63850	16800	336	284

On technical charts, Nifty attempted to touch level of 5070-5100 (refer yesterday's post) but met with selling pressure and could not sustain the rise.Cautious approach with negative bias of participants is not allowing  Nifty to break its resistance zone. Similarly Shorts created by Bears are letting support at lower levels not allowing Nifty to break support zone either. In nutshell, we are trading in a range of 4718-5174  from last 6 weeks waiting to breakout on either side. In the process we are creating good support & resistance zone which will act as catalyst in days to come.

On stock futures front, active counters on volume parameter were State Bank, Infosys, Tata Motors, Reliance and ICICI Bank. Top gainers were Jubilant Foods 10% Chambal 8% Aban 6% Mcleod Russel 6% REC 5%. Top losers were Dhanlakshmi Bank -10% Educomp -4% Infosys -4% Cummins -3% Hexaware -3%.

On stock options front, Infosys 2600 CE, State Bank 1800 CE, Infosys 2500 PE, Infosys 2400 PE, Infosys 2700 CE were most active counters.

On Nifty options front, Positive change in Open Interest was seen in 5000 CE (713400) 5100 CE (895900) 5200 CE ( 363400) 5300 CE ( 551550) 5400 CE (888600) 4600 PE (708200) 4800 PE (507750) 5000 PE (364250) 5200 PE( 263950). Negative change in Open Interest was seen in 4700 CE (-342250) 4900 CE (-186650) 4400 PE (-514200) 4500 PE(-408550). Open Interest In the Money Call Option in Nifty was 58.50 lac shares and Put Options was 76.60 lac shares. Open Interest in Out of the Money Call Option was 2.8 Cr and Put Option was 4.4 Cr shares.

My prognosis of the market is still bearish. We are on weaker wicket as all resistance zones are met with fresh supply which in turn does not allow Nifty to break range on upper side. For a sustainable rally or trend reversal, price movement has to be sharper and must have a potential to scare the bears. Till that happens short the Nifty with adequate stops and enjoy the bear ride.

Happy Trading

Atul Doshi

Derivatives Daily Update: 10.10.2011

Another Up Day: 10.10.2011

On price charts Nifty October Futures opened at 4911, made a low of 4890, bounced back to 5004 and finally closed at 4993.30 up by 94.70 points. Bank Nifty Futures too opened higher at 9081.10, made a low of 8986, bounced back to 9214.90 and finally closed at 9190.25 up by 147.25 points. Second day in a row Nifty has managed to close higher than its previous close. Volatility as measured by India VIX has closed at 30 down by nearly 9 %.

On volume charts, total no. of contracts traded were 41.25 lac and total turnover of the day was 1 lac Cr more or less same as yesterday. Put Call Ratio has marginally come down at 1.19. Traded quantity, no.of contracts as well as trades were all down. Even change in Open Interest was miniscule.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	20838500	169750	-2936800	-58736	-12811
NIFTY	24/11/2011	1470650	116100	-29900	-598	12
NIFTY	29/12/2011	303500	41900	-18550	-371	-68

On technical charts, from last 2 days Nifty is making higher top higher bottom formation. Today Nifty has managed to close above its short term moving averages of 4888 & 4963 (10 & 20 days) respectively. Nifty can pull back up to 5069 which is 50 days moving average and might face some resistance at that level. Data from volume chart is not at all inspiring. Upward price movement is not supported by volumes. Participation is lackluster and traders are cautious.

On stock futures front, actively traded stocks on volume parameter were SBIN, Tata Motors, Reliance, ICICI Bank and DLF. Top gainers were Sun TV 10% Educomp 8% TTK Prestige 8% Delta Corp 8% and Tat Motor DVR 7%. Top losers were Maruti -4% Voltas -3% Neyvelli -3% NCC -2% Areva -2%

On Stock Options front actively traded stocks were SBIN 1800 CE, Reliance 820 CE Reliance 840 CE Reliance 800 PE and Infosys 2600 CE

On Nifty Options front, Positive change in Open Interest was witnessed in 5100 CE (348150) 4500 PE (905200) 4800 PE (642800) 4900 PE (1497350) 5000 CE ( 1221450) 5100 PE (325450) While negative change in Open Interest was seen in 4800 CE (-690750) 4900 CE (-1035500) 5000 CE (-297450) 5200 CE (-207250) 4300 PE (-369200) 4400 PE (-1770200)

In conclusion, I may say that for extreme short term trader there is an opportunity that we might pull back bit further and touch 5070-5100 level where again some supply is expected. Longer term still trend remains bearish as participation in rising market is very low which shows traders are not convinced about improvement in price. My feeling is that in coming few sessions we will break trading range of 4718-5175. On which side we will break only time will tell. Till that time play the range if you can or wait for some meaningful breakout.

Happy Trading

Atul Doshi

Derivatives Daily Update:07.10.2011

An Up Day:07.10.2011

On price charts, Nifty October Future smartly opened at 4880 with a gap made a low of 4872.55 went up to 4939 finally closed at 4898.60 up by 129.30 points. Bank Nifty too followed the trend and closed at 8710.95 up by 332.05. Both the indices stopped their losing streak and closed higher than yesterday. Let me remind you that Nifty in past 10 days fell 450 points and Bank Nifty fell 1300 points. Since we were in oversold zone at least on price front, this correction was due.
 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4880	4939	4872.55	4898.6	129.3
BANK NIFTY	29/09/2011	8940	9141.95	8920.35	9043	332.05

On volume charts, total turnover in FO segment was 1 lac Cr and no.of contracts traded were 41.25 lac. Put Call Ratio improved a bit and was at 1.24 signifying some Put writing has happened in the market due to improved price movement. Traded quantity, no.of contracts and traded shares of Nifty October Future were lower than yesterday though Open Interest was up by 515600 signifying some bull built up has happened.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	20668750	515600	-2004300	-40086	-13807
NIFTY	24/11/2011	1354550	-6350	73600	1472	602
NIFTY	29/12/2011	261600	43450	9350	187	-255

On technical charts, today's price movement can be labelled as smart correction of bear trend.Traditional indicators like RSI, Stochastics, MACD  have marginally improved from yesterday's level but nothing can be inferred from such move. Pull back was in line with expectation as we were trending & trading lower from many sessions. Nifty has barely touched its very short term moving average. Sustainability of such move has to be confirmed with few more up sessions. Till that time nothing on charts suggest that we are breaking the bear trend. Only silver lining if you may say so is that instead of great turbulence in the world markets and with very high Volatility Nifty is not breaking 4718, a low which it made on 26.08.2011.

On stock futures front top traded stocks were State Bank, ICICI Bank, Reliance, Infosys and Tat Motors. Top gainers were Sun TV 14% TTK Prestige 12% Sterlite 8% Axis Bank 8% Tata Motor DVR 8%. Top losers were Bharti -3% Areva -3% Sriram Tranport -3% Idea -3% and GSPL -3%.

On stock options front, top traded counters were Reliance 800 CE, SBIN 1800 CE, SBIN 1700 PE, Bharti 380 CE, Reliance 820 CE.

On Nifty options front, positive change in Open Interest was seen in 4900 CE(218850) 5100 CE(164450) 5200 CE(598700) 5300 CE(257150) 4400 PE(1138650) 4600 PE(436650) 4700 PE(534050) 4800 PE(774250) 4900 PE(758450). Negative change  in Open Interest was seen 4800 CE(-440000) 4100 PE(-361350) 4200 PE(-274700) 4300 PE(-1329850). Open Interest in Out of the Money Call Option was 2.90 Cr shares While Open Interest in Out of the Money Put Option was 4.09 Cr. Open Interest in In the Money Call & Put Option was 64.71 lac shares.

My technical analysis of the data still doesn't influence my mind to change my stance that we are in downward trending market. At the most this can be construed as pull back and we might continue our downward journey. Though one thing worries me or which pushes me to think otherwise is that instead of all adverse news why Nifty is not breaking 4718? But than your Gut feeling too has to be backed & supported by technical data which is not visible till date. Kanoon sirf sabooto pe viswas karta hai bhavnavo pe nahi. Similarly in markets to you have to rely and respect technical levels. Unless there is a confirmation on chart of trend reversal you have to believe that we are in bear trend and hence have to trade short with adequate stops.

Happy Trading

Atul Doshi

Derivatives Daily Update:05.10.2011

Derivatives Segment Review:05.10.2011

On price charts, Nifty October Futures opened at 4791 made a high of 4844, drifted down to 4747 and finally closed marginally lower at 4769.70 by 5.70 points. Bank Nifty Futures opened at 8950 made a high of 9000, drifted down to 8637.95 and finally closed at 8710.95 lower by 183 points. Pressure which was seen in banking stocks  from couple of days continued even today. In last 10 trading sessions Bank Nifty has gone down by nearly 1300 points and Nifty has gone down by 450 points.
 

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4791	4844	4747	4769.3	-5.7
BANK NIFTY	29/09/2011	8950	9000	8637.95	8710.95	-183

On volume charts,Total turnover was 96000 Cr, no.of contracts traded were 40.28 lac, Put Call Ratio was 1.09. Volumes were lower than yesterday. Put Call Ratio further came down indicating unwillingness on part of participants to write put options. Figures of Nifty Futures volume and Open Interest also suggests lackluster trading. No.of contracts traded, traded quantity as well as no.of trades were all down from yesterday's level. Even open Interest has come down. Only inference that can be drawn from volume data is traders are confused or are waiting for some meaningful breakout.
 

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	20153150	-454500	-3915150	-78303	-19751
NIFTY	24/11/2011	1360900	95450	-75550	-1511	-629
NIFTY	29/12/2011	218150	38650	-20050	-401	-61

On technical charts, for the whole day Nifty has traded in range of yesterday's high & low. From last more than a month Nifty is trading in a price band of 4718-5175. Somewhere down the line Nifty should break this price band. Probability is that it will break on lower side. Once it breaks that level we might hover around 4650 levels virtually touching 4300. As said in yesterday's post currently we are trading at 38.2% retracement level of super wave(2228-6349). Once we decisively break this level we might make some meaningful bottom between 4600-4300.

On Stock Futures front, Counters that traded higher on volume parameter were SBIN, ICICI Bank, Reliance, Tata Steel, Axis Bank. Top gainers were Sun TV 6% JP Associates 4% Areva 4% Orchid Chem 4% Educomp 4%. Top losers were Rolta -9% Renuka -8% Jain irrigation -7% Max -7% CESC -6%.

On Stock Options front, Top traded counters were SBIN 1800 CE, SBIN 1700 PE, SBIN 1900 CE, Reliance 800 CE, SBIN 1850 CE.

On Nifty Options front, Positive change in Open Interest was seen in 4800 CE (560650) 4900 CE (211900) 5000 CE (383300) 5100 CE (753900) 5200 CE (307400) 4200 PE (295500) 4400 PE (757800) 4500 PE (432600) Negative change was seen in 4300 PE )(-265600). Open Interest in Out of the Money Call Options was 3.19 Cr shares while Out of the Money Put Options was 3.49 Cr shares. In the Money Call Option was 10.6 Lac while In the Money Put Option was 64.74 Lac shares.

To conclude, We are in downward trending market, Volatility is high, we are trading well below short term as well as long term moving averages which ranges from 4890 to 5490. In such a scenario even if market bounces back in pull back, advise is to short the market. At the cost of repetition let me warn you that Volatility is high and movements in Nifty is very very erratic. If you are caught on the wrong foot you will loose substantial money so trade with caution with negative bias.

Happy Trading

Atul Doshi

Derivatives Daily Update:04.10.2011

Derivative Update:04.10.2011

On price charts, Nifty October Future opened lower at 4823 taking clues from overseas market, went up to 4884.75 on back of short covering as Nifty didn't fall in line with other markets but than it nosedived to 4725.55 and finally closed at 4775 down by 82.75 points. Bank Nifty was more vulnerable as it fell harder than Nifty finally closing at 8893.95 down by 288.65 points.

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4823	4884.75	4725.55	4775	-82.75
BANK NIFTY	29/09/2011	9144	9270.1	8799.95	8893.95	-288.65

On volume charts, total turnover was 1.12 lac Cr, no.of contracts were 46.66 lac and put call ratio was 1.19. Volumes were better than yesterday and put call ratio was slightly down indicating there were less put writers in falling markets. Following data indicates that volumes are increasing when there is downward pressure on price which signifies fresh shorts have been created in the markets. Traded quantity, no.of contracts traded as well as no. of trades are all substantially higher than yesterday. Even Open Interest has substantially improved bu nearly 10 lac shares.

SYMBOL	EXPIRY	OPEN INT	CHG IN OI	TR QTY	CONT	TRADES
NIFTY	25/10/2011	20607650	1030150	7161150	143223	38875
NIFTY	24/11/2011	1265450	127000	190800	3816	1638
NIFTY	29/12/2011	179500	80550	36150	723	382

On technical charts, Nifty is moving as per scripted story. I had indicated in yesterday's post and several other posts earlier that we are in downward trending markets and no meaningful breakout on upper side is visible. I had even indicated that we will break this range on down side and probably might drift lower than 4718. Today it broke one important support of 4813 (200 WMA) and was in process to break 4718. Nifty managed to reach near those level but didn't broke the same. Weakness in market indicate that we will break that level in couple of days. We are hovering around 4765 which is 38.2% retracement of super wave(2228-6349). Once we decisively break this level, it can take us to 50% retracement level which is 4282.

On Stock Futures front, Top traded counters were SBIN, ICICI Bank, Reliance, LT and Tata Steel. Top gainers were KFA 6% Patni Comp 4% Maruti 3% Areva 2% Balrampur Chini 2%. Top losers were Jubilant Food -12% Srei Infra -6% DCB -6% Orchid Chem -6% Allahabad Bank -5%.

On Stock Options front, Top traded counters were Reliance 800 CE, SBIN 1900 CE, SBIN 1800 PE, SBIN 2000 CE and IFCI 32.50 CE.

On Nifty Options front, Positive change in Open Interest was witnessed in 4700 CE (611300) 4800 CE (1025400) 4900 CE (935950) 5000 CE (497500) 5100 CE (516350) 5200 CE (721200) 5300 CE (366650) 4000 PE (321200) 4100 PE ( 402700) 4300 PE ( 2129750) 4500 PE (1103700) 4700 PE (602350) 4800 PE (429450) Negative change in Open Interest was seen in 4400 PE (-421850) 4900 PE (-268200) 5200 PE (-225850) Key thing to watch is there is substantial building of positions in Out of the Money Call Options(2.7 Cr shares) &Out of the Money Put Options(4.11 Cr shares).

My Analysis of the data on all fronts viz Price, Volume & Technical indicate, confirm & vindicate my earlier stance that we are in strong downward trending markets and poised to drift further lower. Till date nothing on the data shows which has a potential to influence my thought process. We are on the verge of breaking trading range(5175-4718) on lower side. Watch this levels very carefully as capitulation selling might come in the market which can take it lower very violently.

Happy Trading..

Atul Doshi

Derivatives Daily Update:03.10.2011

Derivatives Update:03.10.2011

On price charts, Nifty opened with a gap taking clue from international markets. It opened at 4869.80 went down to 4813, bounced back barely to touch 4879 & closed lower at 4857.75 down by 76.55 points. Bank Nifty too followed the trend, opened at 9320 made a low of 9116.05, bounced back to 9348 & finally closed lower at 9182.60 down by 240 points. Both the indices failed to cross their respective lows of yesterday confirming weak & nervous sentiment in the market.

SYMBOL	EXPIRY	OPEN	HIGH	LOW	CLOSE	CHG
NIFTY	29/09/2011	4869.8	4879	4813	4857.75	-76.55
BANK NIFTY	29/09/2011	9320	9348	9116.05	9182.6	-240

On volume charts, total contracts traded were 33.68 lac, total volume in F&O segment was 81,146 crore and Put to Call Ratio was 1.22. Volumes were lower than yesterday. As can be seen from the following data, today was extremely low volume day and minimal change in Open Interest figures suggest extreme low participation & low confidence of traders in the market.

SYMBOL     EXPIRY  OPEN INT CHG IN OI TR QTY CONT TRADES NIFTY      25/10/2011 19577500 -62700 -3453250 -69065 -21251 NIFTY      24/11/2011 1138450 91700 -30300 -606 -298 NIFTY      29/12/2011 98950 59950 48500 970 426

On technical chart, scenario is dismal. Nifty is trading in a range with downward bias. Though it is respecting technical supports & resistance zone. Even today it took classic support at 4813 (200 WMA) as referred in several earlier posts. Similarly it is not breaking classic resistance level of 5175. Volatility as measured by India VIX is ruling higher at 35. Call & Put Option premiums too are higher indicating traders are perceiving higher near term risk in price movements. In such a scenario, one needs to ride with the trend. Momentum in the market shows we will break this range on lower side. Neckline in Head & Shoulder Pattern is formed between 4718-4756 level, once we break this neckline we are headed downwards which might take us to 4300 levels.

On Nifty Options front positive change in Open Interest was seen in 4800 CE (338500) 4900 CE (809350) 5000 CE (308750) 5100 CE (361650) 4200 PE (384450) 4300 PE (1280400) 4500 PE (345200) 4600 PE (492550) 4700 PE (1415600) 4800 PE (1154300)

On Stock Options front, top traded counters were Reliance 800 CE, LT 1400 CE, LT 1350 CE, Reliance 820 CE & SBIN 1850 PE.

On Stock Futures front, top traded counters were Reliance, SBIN, LT, INFY,and Coal India. Top gainers list included BPCL 4% JPPOWER 3% HPCL 3% EDUCOMP 2% IOC 2%. Top losers were SINTEX -11%, SCI -10%, DLF -9%, JSWSTEEL -7% JINDAL STEL -7%

In conclusion, Nothing on the price charts, volume charts, technical charts suggests me to change my opinion. We are in a downward trending market and on verge of breaking trading range on downside. Once we break 4700 levels decisively, we might see level of 4300. Though a word of caution, Volatility in the market is extremely high which might force the market upwards violently, It is advisable to use this opportunity of pull back to sell Nifty Futures unless we see signs of some meaningful bottom in place or the signs of trend reversal. Till that time ride with the trend & enjoy.

Happy trading 

Atul Doshi