Downward Journey Continues: 9 December 2011
Nifty December Futures opened lower than yesterday and closed lower than yesterday. It closed at 4885.90 down by 70.70 points. Bank Nifty too opened lower tried to recover during day but closed lower at 8843.25 down by 86.65 points. Both the Indices made lower top lower bottom formation which indicates weakness in the market place. Volumes were higher than yesterday on all parameters which too is a bad omen. Put Call Ratio came down to 0.97 from 1.08 levels indicating Option writers are not willing to write puts instead they prefer to write Calls. Open Interest in Nifty Futures across all the series came down by 18.25 lk shares indicating some Bull Unwinding is happening in the market. Volatility as measured by India VIX shot up by 4% to 29.53 signifying risk perception in the market is rising. All in all looking at the data, it seems that we are not out of the woods and downward journey will continue for some more time.
Top five individual stocks which attracted higher volumes were SBIN, ICICIBANK, RELIANCE, TATASTEEL and AXISBANK.
Top five individual options which attracted higher activity today were SBIN 1900 CE, SBIN 1800 PE, ICICIBANK 780 CE, ICICIBANK 740 CE and SBIN 2000 CE
Top five individual stocks which gained today were OPTOCIRCUIT 5%, BRFL 5%, PATELENG 5%, ONMOBILE 4% and ALBK 2%.
Top five individual stocks which lost ground were 3IINFOTECH -7%, BGRENERGY -7%, DISHTV -6%, SAIL -6% and JETAIRWAYS -5%.
Nifty option series where POSITIVE change in open interest was seen were 4800 CE (9.87 LK) 4900 CE (5.94 LK) 5000 CE (11.40 LK) 5100 CE (5.77 LK) 5200 CE (5.66 LK) 5400 CE (4.11 LK) 5500 CE (1.21 LK) 4500 PE (3.82 LK) 4600 PE (7.60 LK) 4800 PE (2.20 LK) 4900 (2.88 LK).
Nifty option series where NEGATIVE change in open interest was seen were 4200 PE (-1.12 LK) 4400 PE (-5.26 LK) 5000 PE (-5.27 LK) 5100 PE (-6.38 LK)
Outstanding open interest in Out of the Money Call Options stood at 4.65 Cr shares and that of Put Options stood at 4.16 Cr shares. Outstanding open interest in In the Money Call Options stood at 62.36 LK shares and that of Put Options stood at 1.70 Cr shares.
My prognosis is still tilted towards markets going down as all the indicators, technicals, volumes and price movements suggest that market participants are biased towards negative trend. Revisit of 4630 levels is very much the possibility. Probability of market moving higher than 5350 in near future seems difficult. My advice to traders is trend is your friend and hence remain with trend till you see any sustainable breakout or change in technicals.
Statutory Warning: It is foolish to trade without proper stop loss.
Happy Trading
Atul Doshi
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