Extreme Weak Day : 15.11.2011
Nifty November Futures after opening weak was not able to surpass its yesterday's high and made a lower low today. It closed at 5078.20 down by 77.65 points. Bank Nifty November Futures too followed the trend and it made a lower top and lower bottom. It also closed weaker at 9080.65 down by 195.75 points. It was no respite day with higher trading volumes than yesterday. Open Interest in Nifty on net basis across all series was up by 3.13 lac shares though it was down by 6.23 lac shares in November series. Open Interest in Bank Nifty across all series was up by 1 lac shares. Put Call Ratio remain unchanged at 0.90. Volatility as measured by India VIX was at 25.97 up by 3%. Volatility from couple of days is steadily increasing as traders are perceiving some element of risk in trading.
Top Five Individual Stocks which attracted higher volumes were SBIN TATAMOTORS ICICIBANK TATA STEEL DLF. Top Five Individual Stock which managed to close higher were CIPLA 6% DCHL 5% KFA 3% TATAMOTORS 2% NHPC 2%. Top Five Individual Stocks which lost ground were INDHOTEL -13% TRIVENI -12% LITL -12% KSOIL -11% RENUKA -11%.
Top Five Individual Stock Options which traded higher on volume parameter were SBIN 1800 CE SBIN 1750 CE SBIN 1750 PE SBIN 1850 CE SBIN 1900 CE.
Nifty November Option Series where POSITIVE change in Open Interest was witnessed were 5000 CE (4.31 lac) 5100 CE (22.50 lac) 5200 CE (6.88 lac) 5300 CE (5.11 lac) 5400 CE (4.52 lac) 4800 PE (8.68 lac) 4900 PE (8.06 lac) 5000 PE (6.76 lac). Nifty November Option Series where NEGATIVE change in Open Interest was witnessed were 5500 CE (-3.90 lac) 5600 CE (-2.84 lac) 5100 PE (-3.37 lac) 5200 PE (-10.30 lac) 5300 PE (2.84 lac). Outstanding Open Interest in Out of the Money Put Option was 2.96 Cr shares and that of Call Option was 3.44 Cr shares. Outstanding Open Interest of In the Money Put Option was 1.36 Cr shares and that of Call Option was 2.81 Cr shares. If we look at the data from Option Writers eyes than they were shopping Call Options in a huge way meaning thereby that traders in the markets does not see markets moving up in near futures.
I was screaming from the roof that markets are poised to go down. Today we saw complete break down in the market as even a small rise in price was met with huge supply. All traditional indicators and tools on charts have turned negative which gives me feeling that markets have entered a nervous zone and we will drift lower. In my opinion we might test 4700 or might go even lower than that but we well find some support at 4760 -4860 zone as they are 200 Week's Simple & Exponential Moving Averages. So advise is to trade short on every rally with stop above 5340.
Happy Trading
Atul Doshi
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