Short Covering Day: 21 December 2011
Nifty December Futures after opening nearly 100 points up taking clues from international markets continued its upward journey and closed 157 points up at 4711.50. Bank Nifty too followed the streak and closed at 8198.85 up by whooping 401.15 points. Open Interest in December futures came down by 22 lk shares though on aggregate basis across all the series it came down by 11.87 lk shares. Volumes were higher than yesterday. Put Call Ratio was almost stable at 0.84 and Volatility as measured by India VIX came down by 10 % at 27.53. Dollar Rupee pair was trading at 52.75. All in all it was a day of short covering and consolidation.
Today’s price movement prima facie suggests that it was a relief rally partly due to short covering. In hindsight it can be said that Nifty has taken support at Make or Break level of 4550. In coming days whether this support holds or not only time will tell and surely it can not be construed from single day’s upward price movement. Nifty is trading well below its medium term to long term moving averages which are placed at 5000(50 days) and 5317(200 days). In my opinion, today’s price movement can be labeled as dead cat bounce if we are not able to sustain tomorrow. If we sustain and move above 4800, this relief rally can continue up to 5000 level where again it will have to face stiff resistance. Those who were short yesterday got stopped out at 4720. Use 4680 level to again short the market or wait for Nifty to get tired at higher levels to re enter your shorts.
Top five individual stocks which attracted higher volumes were SBIN, ICICIBANK, TATASTEEL, LT and TATAMOTORS.
Top five individual options which attracted higher activity today were SBIN 1700 CE, SBIN 1650 CE, SBIN 1600 PE, TATASTEEL 360 CE and LT 1000 CE.
Top five individual stocks which gained today were IBREALEST 11%, KSOIL 10%, JSWSTEEL 10%, SESAGOA 9% and RCOM 9%.
Top five individual stocks which lost ground were PANTALOON -5%, INDHOTEL -4%, RUCHISOYA -4%, SOBHA -3% and APOLLOTYRE -3%.
Nifty option series where POSITIVE change in open interest was seen were 4900 CE (8.13 LK) 5000 CE (2.15 LK) 4100 PE (1.21 LK) 4300 PE (4.78 LK) 4600 PE (11.12 LK) 4700 PE (12.68 LK) 4800 CE (4.41 LK)
Nifty option series where NEGATIVE change in open interest was seen were 4500 CE (-9.04 LK) 4600 CE (-18.57 LK) 4700 CE (-5.31 LK) 4800 CE (-6.31 LK) 5200 CE (-1.48 LK) 4900 PE (-1.01 LK) 5000 PE (-1.78 LK)
Outstanding open interest in Out of the Money Call Options stood at 4.94 Cr shares and that of Put Options stood at 4.06 Cr shares. Outstanding open interest in In the Money Call Options stood at 1.15 Cr shares and that of Put Options stood at 1.32 Cr shares.
Happy Trading
Atul Doshi
Happy Trading
Atul Doshi
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