Carnage on Street: 16 December 2011.
Nifty December Futures after opening strong made a higher top but could not sustain at higher levels and completely broke off making a lower bottom and finally closed lower by 114.25 points at 4643.13. Today it broke earlier lower level of 4630 and even closed weaker. Bank Nifty too made a higher top and lower bottom and finally closed at 8139.80 down by 310.35 points. Volumes were substantially higher than yesterday’s level in both Futures and Option segment. Open Interest in Nifty across all the series saw a remarkable jump of 14.17 lk shares. Put Call Ratio was at 0.90 down from 0.94 levels and Volatility as measured by India VIX was at 29.69 up by 3%. Dollar Rupee closed lower at 52.80 from yesterday’s level of 53.81. In substance there was carnage on street and lower price movement coupled with increase in Open Interest and increased volume is bad omen as it indicates short built up in the market.
My prognosis that we are in a strong down trend and we will revisit 4630 level has once again being vindicated. Looking to today’s trading data, price movement, open interest figures, Put Call Ratio and volatility all indicate that we are in strong downward trending markets and we might see further lows being made in the market. As said in yesterday’s post those who ventured shorting Nifty when it stopped rise would have handsomely gained today. My advice is still to short the Nifty whenever you find an opportunity or when Nifty finds it difficult to move higher. Level of 4300- 4500 can not be ruled out.
Those who want to see some statistics of today, they are presented below:
Top five individual stocks which attracted higher volumes were SBIN, ICICIBANK, AXISBANK, RELIANCE, and LT.
Top five individual options which attracted higher activity today were SBIN 1800 CE, SBIN 1700 PE, SBIN 1900 CE, SBIN 1850 CE and 1600 PE.
Top five individual stocks which gained today were GAIL 4%, BRFL 4%, INDIAINFO 3%, DIVISLAB 2% and ABAN 2%.
Top five individual stocks which lost ground were ESSAROIL -17%, LITL -12%, ARVIND -11% BGRENERGY -11% and -10%.
Nifty option series where POSITIVE change in open interest was seen were 4500 CE (4.37 LK), 4600 CE (21.44 LK), 4700 CE (9.95 LK), 4800 CE (3.80 LK), 4900 CE (1.90 LK), 5000 CE (4.79 LK), 5200 (2.30 LK), 4100 PE (2.39 LK), 4200 PE (1 LK), 4300 PE (3.94 LK), 4500 PE (4.46 LK), 4600 PE (5.72 LK).
Nifty option series where NEGATIVE change in open interest was seen were 5400 CE (-1.23 LK), 5500 CE (-1.10 LK) 4700 PE (-7.23 LK) 4800 PE (-8.36 LK), 4900 PE
(-6.67 LK).
Outstanding open interest in Out of the Money Call Options stood at 5.53 Cr shares and that of Put Options stood at 3.16 Cr shares. Outstanding open interest in In the Money Call Options stood at 53.74 LK shares and that of Put Options stood at 2.35 Cr shares.
FII’s (provisional data) Bought Index Futures worth 611 Cr Sold Index Options worth 1431 Cr. Sold Stock Futures worth 183 Cr and sold Stock Options worth 50 Cr.
Happy Trading
Atul Doshi
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