Derivatives Daily Update: February 9, 2012

Breakout Day: February 9, 2012

Nifty February Futures finally broke crucial level of 5400 by closing above the same at 5437.05 up by 48.55 points. Bank Nifty too followed the streak and closed at 10551.55 up by 210.15 points. Volumes were lower than yesterday as we saw traction and breakout in last ½ hour of trading. Open Interest saw an up tick by 7.24 lk shares at 2.97 Cr shares across all the open series. Put Call Ratio too saw a up tick and was at 1.21 showing participants were confident that market will go up as they wrote more puts against calls. Volatility as measured by India VIX was muted as it came down by 4% at 23.30. Dollar Rupee pair was trading at 49.65. All in all we can fairly construe that breakout that we were waiting for has finally happened.

As said yesterday, if Nifty manages to break 5400 level in its third attempt and closes above 5400, probability of its touching 5650 will become more evident. My advice for traders is to hold on your longs as long as Nifty comfortably trades above 5400. Even if it breaks 5400 again, please don’t panic and wait till you see level of 5300. Exit only if it breaks 5200 with a promise to reenter again if it starts moving up once again. To make it simpler it seems that new uptrend has started and every fall will give you an opportunity to buy which you should utilize properly.

Top five individual stocks which gained today were DHANBANK 18%, EKC 13%, HCC 12%, HOTELEELA 11% and JUBLFOOD 10%.

Top five individual stocks which lost ground were ADANIENT -5%, ADANIPOWER -3%, SRTRANSFIN -3%, INDIAINFO -2% and AUROPHARMA -2%.

Top five individual stocks which attracted higher volumes were HINDALCO, TATASTEEL, ICICIBANK, SBIN and DLF.

Top five individual options which attracted higher activity today were TATASTEEL 460 CE, HINDALCO 160 CE, TATASTEEL 440 PE, SBIN 2200 CE and ICICIBANK 940 CE.

Nifty option series where POSITIVE change in open interest was seen were 5600 CE (1.39 LK) 5700 CE (3.21 LK) 5800 CE (1.29 LK) 5000 PE (4.40 LK) 5100 PE (1.01 LK) 5300 PE (11.98 LK) 5400 PE (11.75 LK) 5500 PE (1.91 LK)

Nifty option series where NEGATIVE change in open interest was seen were 5000 CE (1.17 LK) 5200 CE (1.34 LK) 5300 CE (2.07 LK) 5400 CE (1.89 LK) 4400 PE (1.66 LK) 4900 PE (8.23 LK) 5200 PE (3.74 LK)

Outstanding open interest in Out of the Money Call Options stood at 1.47 Cr shares and that of Put Options stood at 5.62 Cr shares. Outstanding open interest in In the Money Call Options stood at 1.87 Cr shares and that of Put Options stood at 24 Lk shares