Downward Journey Continues:14 December 2011
Nifty December Futures after opening weak was able to make higher top higher bottom formation but was not able to sustain at higher levels and closed lower than yesterday at 4764.20 down by 47.15 points. Bank Nifty December Futures too closed at 8512.35 down by 41.55 points. Volumes more or less remained at yesterday’s level. Open Interest in Nifty Futures across all the series saw an increase by 10.28 lakh shares and that of Bank Nifty saw an increase by 1.35 lakh shares. Addition in Open Interest in a falling market suggests that fresh shorts have been created in the market. Put Call Ratio too increase marginally to 0.98 from 0.91 levels. Volatility as measured by India VIX was at 28.79 up by 2.5% from yesterday’s level of 28.11. Dollar Rupee Pair is also playing a spoil sport as Dollar Rupee closed at 53.92 in December Futures.
My prognosis after looking at today’s data vindicates my bearish stance. As said in yesterday’s post, if Nifty is not able to sustain at higher levels, it is advisable to short the Nifty has proved to be right and today Nifty closed at lower levels than yesterday. My advice is to hold on your shorts with stop above 4945 & 5075. I feel Nifty will revisit 4630 level and if weakness persist, we might see much lower level of 4300-4500.
Those who are interested in little bit more analysis some additional information is given below:
Top five individual stocks which attracted higher volumes were SBIN, ICICIBANK, RELIANCE, TATASTEEL and TATAMOTORS.
Top five individual options which attracted higher activity today were SBIN 1800 CE, SBIN 1900 CE, SBIN 1850 CE, TATASTEEL 400 CE and RELIANCE 760 CE.
Top five individual stocks which gained today were TRIVENI 8%, SUNTV 5%, COREEDUTEC 4%, DISHTV 4% and TTML 3%.
Top five individual stocks which lost ground were AREVAT&D -26%, 3IINFOTECH -11%, BALRAMCHIN -10% PANTALOONR -8% and SINTEX -8%.
Nifty option series where POSITIVE change in open interest was seen were 4800 CE (8.99 LK) 4900 CE (6.38 LK) 5000 CE (3.51 LK) 5100 CE (3.05 LK) 4300 PE (9.14 LK) 4700 PE (4.36 LK) 4800 PE (4.33 LK).
Nifty option series where NEGATIVE change in open interest was seen were 5600 CE (-1.73 LK) 4200 PE (-7.80 LK) 4900 PE (-3.90 LK)
Outstanding open interest in Out of the Money Call Options stood at 5.13 Cr shares and that of Put Options stood at 3.88 Cr shares. Outstanding open interest in In the Money Call Options stood at 54.88 LK shares and that of Put Options stood at 1.93 Cr shares.
Happy Trading
Atul Doshi
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