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Thursday, 16 February 2012

Derivatives Daily Update: February 16, 2012


Day of Consolidation: February 16, 2012

Nifty February Futures more or less traded in yesterday’s range and closed at 5537.80 down by 14.75 points. Bank Nifty too followed the trend by remaining in yesterday’s range and closed at 10948.10 down by 23.15 points. Volumes were lower than yesterday though Stock Futures saw increase in volumes perhaps due to some early birds shifting their positions in to March Series. Open Interest was marginally lower by 1.64 lakh shares and stood at 2.97 Cr shares. Put Call Ratio was further up to 1.27 from 1.16 levels indicating participants are comfortable with momentum and they don’t mind writing puts against calls. Volatility as measured by India VIX shot up to 23.33 from 22.1 up by nearly 6%. Dollar Rupee pair fairly remained stable at 49.39. All in all it seems that markets are consolidating after huge run and will resume its uptrend once consolidation is over.

I believe that in short term we are headed towards 5650 levels and  their we might pause for a while and if no great supply comes at that level we might continue with uptrend. Once we cross that level comfortably and sustainably, every dip after that will be an opportunity to buy as than ground will be clear to achieve earlier top and we might attempt to go beyond the earlier high and make a new high. Alternatively if we fail to clear this level and fall miserably and go below 5150 level than possibility of touching a new low is very much alive. All I mean to say is that we are at such an inflection point where both the possibilities exist. Watch the markets very carefully as coming series is full of events including Budget and State elections.

Top five individual stocks which gained today were IFCI 12%, SCI 11%, KTKBANK 9%, HDIL 8% and DCHL 8%.

Top five individual stocks which lost ground were COALINDIA -6%, VOLTAS -6%, HINDALCO -55, INDUSINDBK -5% and ZEEL -4%.

Top five individual stocks which attracted higher volumes were SBIN, TATASTEEL, RELIANCE, TATAMOTORS and ICICIBANK.

Top five individual options which attracted higher activity today were SBIN 2300 CE, SBIN 2400 CE, SBIN 2200 PE, SBIN 2350 CE and RELIANCE 840 CE.

Nifty option series where POSITIVE change in open interest was seen were 5500 CE (4.93 LK) 5600 CE (7.50 LK) 4400 PE (7.17 LK) 4900 PE (1.30 LK) 5300 PE (8.64 LK) 5400 PE (9.10 LK) 5500 PE (5,46 LK) 5600 PE 92.44 LK)

Nifty option series where NEGATIVE change in open interest was seen were 5200 CE (-1.02 LK) 5300 CE (-1.35 LK) 5400 CE (-2.42 LK) 5700 CE (-4.08 LK) 5000 PE (-2.11 LK) 5100 PE (1.44 LK)

Outstanding open interest in Out of the Money Call Options stood at 1.29 Cr shares and that of Put Options stood at 6.03 Cr shares. Outstanding open interest in In the Money Call Options stood at 1.70 Cr shares and that of Put Options stood at 87.28 Lk shares.

Happy Trading

Atul Doshi

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