Downward Breakout Day: 08 December 2011
Nifty December Futures after starting a day on weak note continued its downward journey nullifying yesterday’s gain. Nifty December Futures closed at 4956.60 down by 129.50 points or nearly 3%. Bank Nifty too followed the trend and it closed at 8929.90 down by 269.40 points. Volumes were higher than yesterday on all parameters viz, traded value, and traded quantity, no. of contracts and no. of trades. Put Call Ratio too improved to 1.08. Volatility as measured by India VIX shot up to 28.58 up by 8%. Open Interest in Nifty Futures across all the series came down by 12.29 lk shares and that of Bank Nifty came down by 6 k shares. Tired Bull liquidation was witnessed in the market.
Top five individual stocks which attracted higher volumes were SBIN, ICICIBANK, RELIANCE, TATASTEEL and LT.
Top five individual options which attracted higher activity today were SBIN 2000 CE, SBIN 1800 PE, SBIN 1900 CE, SBIN 1950 CE and SBIN 1850 PE.
Top five individual stocks which gained today were DHANBANK 10%, SREINFRA 4%, BRFL 4%, PIRHEALTH 4% and WIPRO 2%.
Top five individual stocks which lost ground were VIPIND -9%, EKC -9%, NATIONALUM -8%, GMRINFRA -8% and NCC -8%.
Nifty option series where POSITIVE change in open interest was seen were 4900 CE (6.68 LK) 5000 CE (7.85 LK) 5100 CE (10.25 LK) 5200 CE (10.44 LK) 5300 CE (2.24 LK) 5500 CE (1.30 LK).
Nifty option series where NEGATIVE change in open interest was seen were 4400 PE (-2.89 LK) 4900 PE (-2.07 LK) 5000 PE (-8.35 LK) 5100 PE (-5.05 LK)
Outstanding open interest in Out of the Money Call Options stood at 3.98 Cr shares and that of Put Options stood at 4.61 Cr shares. Outstanding open interest in In the Money Call Options stood at 94.12 LK shares and that of Put Options stood at 1.33 Cr shares.
In conclusion, Bullish traction that we saw yesterday proved to be one night stand and markets completely broke down today. Nifty is facing stiff resistance at higher levels. Possibility of Nifty touching earlier support of 4630 has dramatically increased. Those who hanged on to their bullish positions yesterday were stopped out today at 5025 levels. I reiterate my earlier stance that we are in to strong bear market and probably we might break 4630 level and will make bottom in region of 4300 -4500 levels. Markets are witnessing higher volatility and choppiness and hence it is advisable to trade with strict stop loss.
Happy Trading
Atul Doshi
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