Derivatives Daily Update: September 20 2012

Consolidation Continues: September 20, 2012

Nifty September Futures closed at 5571 down by 41.25 points. Bank Nifty closed at 10952.30 down by 110.10 points. Open Interest in Nifty across all the series was up by 4.82 lakh at 2.52 Cr shares. Turnover was up at Rs 1.26 trillion. Put Call Ratio was up at 1.17 for both Index & Stock Option across all series and for Nifty alone in current series it was up at 1.51 which indicates traders are bullish and they are not in mood to give it up soon. Volatility as measured by India VIX was up by 4 % at 18.62. Dollar Rupee pair was trading higher at 54.31. In all it was a day of consolidation.

I stick to my stand that we are in intermediate Bull Run and this fall from higher level is correction which might stop at 5550. My stand was vindicated today. We have bounced back from intra day low of 5551.25 today. I still believe that target of 5760 is achievable. Medium to long term traders should ride the Bull Run with 5300 as their ultimate stop loss and first price target of 5760. If we sustain above 5760, than we will make a new high in this financial year.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 18 2012

Day of Consolidation: September 18, 2012

Nifty September Futures closed at 5612.25 down by 4.45 points. Bank Nifty closed at 11062.40 up by 85.10 points. Open Interest in Nifty was up by 6.93 lakh shares at 2.47 Cr shares. Turnover was lower at Rs 1.16 trillion. Put Call Ratio across all the series again shot up to 1.08 and for Nifty alone in current series it was up at 1.53. Volatility as measured by India VIX was mildly up at 17.83 and Dollar Rupee pair was also trading slightly higher at 54.04. In all it was a day of consolidation and absolutely range bound movements were witnessed in the market.

In my opinion, medium to long term we are in Bull trend and we might go and touch 5760 in coming week before expiry. In short term though we might consolidate for a day or two and in the process stabilize around 5550. Every dip is a buying opportunity and traders must trade accordingly. Position traders should remain long till major level which is pegged at 5300 is not broken on closing basis.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 17 2012

Bull Run Continues: September 17, 2012

Nifty September Futures opened with a gap for second consecutive day and closed higher at 5616.70 up by 31.80 points. Bank Nifty closed higher by 326.45 points at 10977.30. Open Interest in Nifty across all series was up by 12.32 lakh shares at 2.40 Cr shares. Turnover was high at Rs 1.94 trillion. Put Call Ratio across all the series for both Index & Stock option was down at 0.94. Volatility as measured by India VIX was smartly up by 16% at 17.78 and Dollar Rupee pair was trading lower at 53.81. In all it was a bullish day.

As far as price momentum is concerned it is very much evident in the market. My price target of 5630 was achieved today. In medium to long term it seems that momentum will continue and we might go and kiss 5760 with slight hiccup at 5700. In short run though it seems that we might go and consolidate around 5550 level. The reason which leads me to believe this is twofold. One, Volatility has drastically shot up and if it continues to do so it might put pressure on price of Nifty. Second, Put Call Ratio has fallen below 1 which doesn’t augur well for the market but mind you these are short term hiccups and after that upward momentum might continue. It is advisable to hold your longs or add in dips with ultimate price target of 5760.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 14 2012

Breakout Day: September 14, 2012

Nifty September Futures opened with gap and closed at the day’s high at 5584.90. Bank Nifty too opened with a bang and closed whoopingly high by 424.95 points at 10650.85. Open Interest in Nifty across all the series was up by 20 lakh shares at 2.28 Cr shares indicating Bulls have become aggressive in mopping up their positions. Turnover was up by more than double at Rs 1.95 trillion. Put Call Ratio was slightly down at 1.02 across all the series for both Index & Stock Options but was smartly up at 1.44 for Nifty alone in current series. Volatility as measured by India VIX was down by 2% at 15.38 and Dollar Rupee pair was smartly down to 54.29 helping Rupee to become stronger against Dollar. In all it was a day of Bulls who swept Bears in today’s session.

My belief has once again being vindicated as we crossed 5500 in a style and are approaching fast to kiss another important level of 5630. Undertone is strong, Bulls are active, bears are worried and so it is advisable to remain Bullish in medium to long term. In short term corrections might come which one should use to add positions.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 13 2012

Listless Day: September 13, 2012

Nifty September Futures closed mildly up by 3.75 points at 5450.70. Bank Nifty closed up by 9 points at 10225.90. Open Interest in Nifty was up by 3.75 lakh shares at 2.08 Cr shares. Turnover was slightly less at Rs 819 bn. Put Call Ratio for both Index & Stock Option across all the series was up at 1.08 though only for Nifty in current series it was down at 1.20. Volatility as measured by India VIX was up at 15.67 by 4% and Dollar Rupee pair was also trading slightly higher at 55.46. In it was a cautious day ahead Fed Chairman Ben Bernanke’s Statement on Friday.

I still stick to my opinion that we will go and kiss 5500 in coming days and if we close above 5500 than we will reach 5630. It is advisable to trade with strict stop loss as much awaited and important event has always potential to manipulate the market in either direction. It seems that under current is strong and market might gain further.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 12 2012

Better Day: September 12, 2012

Nifty September Futures closed at 5446.95 up by 41.60 points. Bank Nifty closed at 10216.90 up by 59.40 points. Open Interest in Nifty across all the series was up by 6 lakh shares at 2.04 Cr shares. Turnover was up at Rs 1.17 trillion. Put Call Ratio for both Index & Stock Option was slightly lower at 1.03 though for only Nifty for current series was up at 1.25. Volatility as measured by India VIX was down by 2% at 15.04 and Dollar Rupee pair was also under pressure at 55.29. In all it was definitely a better day.

As said in couple of posts, we are heading for 5500 and if breached probably heading for 5630. Traders are advised to remain long with stop below 5330 or for intra day traders 5390 and for slightly medium term traders 5330. Momentum in market seems to be returning so enjoy the bull ride.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 11 2012

Bullish Day: September 11, 2012

Nifty September Futures closed higher by 33.70 points at 5405.35. Bank Nifty closed at 10157.50 up by 61.50 points. Open Interest in Nifty across all the series was up by 10.23 lakh shares at 1.98 Cr shares. Turnover was up at Rs 991 bn. Put Call Ratio across all the series for both Index & Stock Option was almost unchanged at 1.08. Volatility as measured by India VIX was up at 15.38 and Dollar Rupee pair was trading slightly lower at 55.46. In all it was better day with Bulls bouncing back in action as evident from increase in Open Interest.

As said yesterday Nifty kissed 5400 today and was in process of touching 5500 in coming days. My advice to traders is to punt on Bull side with stop loss placed below 5330 in short term and 5200 in medium term.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 10 2012

Day of Consolidation: September 10, 2012

Nifty September Futures closed at 5371.65 down by 8.55 points. Bank Nifty closed at 10096 down by 83 points. Open Interest in Nifty across all the series was down by 16.28 lakh shares at 1.87 Cr shares implying some unwinding by Bulls in the market. Turnover was Rs 764 bn. Put Call Ratio across all the series for both Index & Stock Option was pegged at 1.08. Volatility as measured by India VIX was up by 3.5 % at 15.27 and Dollar Rupee pair was trading at 55.55. In all it was a day of consolidation with seeming probability of Bulls unwinding in the market lacking follow up action by traders.

We traded in a range of 40-50 points. As we have closed above 5300 level for consistently couple of days, I feel we are consolidating and might move ahead to kiss 5400 and subsequently 5500. It is advisable to trade on Bull side but of course with strict stop loss.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 7 2012

Gap Up Opening: September 7, 2012

Nifty September Futures opened with a gap and closed at almost high of the day at 5359.10 up by 98 points. Bank Nifty closed at 10139.85 up by 201.95 points. Open Interest in Nifty was up by 10 lakh shares at 2.01 Cr shares indicating mop of positions by Bulls. Turnover too was high at Rs 1.06 trillion. Put Call Ratio across all the series for both Index & Stock option was smartly up at 1.09. Option writers squared off their Call Options and Wrote Put Options. Volatility as measured by India VIX was down by drastic 10% at 15.26 and Dollar Rupee pair was also trading lower at 55.55. In all markets were good backed by favorable statistics on all count.

I have been proved wrong and instead of falling further we bounced back very smartly. I, though in yesterday’s post warned that in coming seven days we are going to be greeted by many global events which have potential to manipulate markets. Yesterday’s favorable global news lead to gap up opening and gave a better close. We are now broadly trading in a range of 5250-5450 and on either side of the range we see resistance. This range is going to be crucial and traders are advised to trade in a range.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 6 2012

Day of Consolidation: September 6, 2012

Nifty September Futures are in consolidation phase and have managed to close higher at 5261.10 up by 7.75 points. Bank Nifty has closed higher at 9937.90 up by 37.95 points. Open Interest in Nifty was down by 8.69 lakh shares at 1.91 Cr shares. Turnover was slightly lower at Rs 805 bn. Put Call Ratio across all the series fro both Index & Stock Option was slightly up at 0.88 though way below comfortable level of 1. Volatility as measured by India VIX was marginally down at 16.98 and Dollar Rupee pair was trading at 55.92. In all it was a day of consolidation and markets are waiting to break out on either side.

In my opinion since we have not managed to close above 5270 today also, we are heading southwards and as said yesterday we might test 5125. If we break the same we might test 5033. It is advisable to trade with strict stop loss as in coming seven sessions we are going to be greeted by many important global events which has potential to manipulate market in substantial way.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 5 2012

Weak Day: September 5, 2012

Nifty September Futures closed at 5253.35 down by 46.05 points. Bank Nifty closed at 9899.95 down by 188.10 points. Turnover was up at Rs 841 bn. Open Interest was down by 85k at 2 Cr shares. Put Call Ratio across all the series was slightly up at 0.82. Volatility as measured by India VIX was up by 2.5% at 17.01 causing Nifty to fall. Dollar Rupee pair was also trading higher at 56.06 which further caused Nifty to remain under pressure. In all it was a weak day and as traders didn’t find any follow up buying they were tempted to square off their positions.

We have breached 5270 on closing basis which doesn’t augur well for the market. Incidentally 5257 is medium term moving average and today we have closed below it too. If we are unable to bounce back tomorrow, above this level on closing basis than probably, we are heading towards 5125 which is long term moving average and most likely might go and test 5033. Extreme caution is advised to traders.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 4 2012

Steady Day: September 4, 2012

Nifty September Futures closed at 5299.40 up by 16.5 points. Bank Nifty closed at 10088.05 up by 55.40 points. Open Interest in Nifty across all series saw reduction by 7.29 lakh shares at 2.01 Cr shares indicating some short covering happening in the market. Turnover was pegged at Rs 735 bn. Put Call Ratio was unimpressive at 0.79 indicating traders are fearful & weary about markets going up. Volatility as measured by India VIX was pegged at 16.59 down by 4% and Dollar Rupee pair was trading at 55.77. In all it was steady market with too much of caution.

In my opinion, we are not breaching 5270 on closing basis which augurs well for the market and as can be seen from today’s data even bears have covered their shorts as we are not breaching that level. Anyway as long as we don’t close below 5230, target of achieving 5500 is still alive. It is advisable to trade with strict stop loss.

Happy Trading

Atul Doshi

Derivatives Daily Update: September 3 2012

Lackluster Day: September 3, 2012

Nifty September Futures closed at 5282.90 down y 8.75 points. Bank Nifty closed at 10032.65 down by 38.05 points. Open Interest in Nifty was up by 2.10 lakh shares at 2.08 Cr shares. Turnover was slightly lower than yesterday. It was a lackluster day without ant fanfare in the market.

I stick to my earlier stance and nothing has changed which can influence that view.

Happy Trading

Atul Doshi

Derivatives Daily Update: August 31 2012

Weak Opening September Series: August 31 2012

Nifty September series opened weak. Nifty September closed at 5291.65 down by 15.25 points. Bank Nifty closed at 10070.70 up by 4.85 points. Open Interest in Nifty across all the series was 2.06 Cr shares. Turnover on the first day series was Rs 888 bn. Put Call Ratio for both Stock & Index Option was pegged at 0.88. Volatility as measured by India VIX was up by 3.78% at 17.30. Dollar Rupee pair was trading bit lower at 55.76. In all it was a weak day as traders were not gung ho about the markets as can be seen from PCR activity as well as volume in the market.

Nifty is not breaching 5270 on closing basis. Crucial point though is 5230. If we break 5230 than Nifty will end its intermediate uptrend and if weakness persists, it may fall further. Anyway if it trades above 5300 on sustainable basis than target of 5500 is still alive. It is advisable to adhere to strict stop loss while trading.

Happy Trading

Atul Doshi