Derivatives Daily Update: March 21, 2012

Day of Bulls: March 21, 2012

After listlessness of single day Nifty zoomed back to 5394.50 up by 97.50 points. Bank Nifty too closed up by 270.65 points at 10596.20. Volumes were higher than yesterday at Rs 1.5 trillion. Open Interest in Nifty across all the series came down just by 1.24 lakh shares indicating only meager quantity of shorts have been squared off. Put Call Ratio have risen to 1.03 from 0.99 indicating either short Calls have been covered up or fresh Put writing has been done by traders which in turn indicates market participants have turned bit bullish. Volatility as measured by India VIX is at its lowest in recent times at 21 down by 4%. In coming days choppiness is expected in the market as VIX will start moving upwards towards its mean. Dollar Rupee duo was trading up at 50.58 and some pressure on rupee was felt by participants.

My stance that we are in medium term Bull Market is once again vindicated today. In several posts earlier, I have been maintaining that the current fall from higher level is a correction and this correction will not continue beyond 5175. I have been advising that every fall in the market warrants buying and today we have witnessed the same. If markets keeps on moving up as it seems from the data, than we might touch resistance zone of 5550-5600. Once we clear this level, I will not be surprised if we make a new high. My advice is to buy in every dips with adequate stop loss.

Top five individual stocks which gained today were TTKPRESTIG 15%, CENTURYTEX 10%, MRF 9%, BGRENERGY 9% and HDIL 9%.

Top five individual stocks which lost ground were OFSS -1%, CAIRN -1%, HINDALCO -1%, ADANIPORTS -1% SUNPHARMA -1%.

Top five individual stocks which attracted higher volumes were SBIN, TATAMOTORS, TATASTEEL, HDIL and LICHSGFIN.

Top five individual options which attracted higher activity today were SBIN 2300 CE, TATAMOTORS 280 CE, SBIN 2200 CE, SBIN 2250 CE and RELIANCE 780 CE.

Nifty option series where POSITIVE change in open interest was seen were 5000 PE (3.41 LK) 5200 PE (3.40 LK) 5300 PE (10.96 LK) 5400 PE (15 LK) 5500 PE (1.46 LK)

Nifty option series where NEGATIVE change in open interest was seen were 5100 CE (1.87 LK) 5200 CE (4.49 LK) 5300 CE (6.24 LK0 5500 CE (2.53 LK) 5600 CE (1.40 LK) 5700 CE (3.65 LK) 5800 CE (1.35 LK) 5900 CE (5.56 LK) 6000 CE (2.46 LK) 6100 CE (4.15 LK) 4600 PE (1.24 LK) 4800 PE (1.99 LK)

Outstanding open interest in Out of the Money Call Options stood at 3.08 Cr shares and that of Put Options stood at 5.22 Cr shares. Outstanding open interest in In the Money Call Options stood at 1.61 Cr shares and that of Put Options stood at 43.66 Lk shares. Put Call Ratio of current series alone stands at 1.20.

Happy Trading Atul Doshi