There is heavy resistance at the 5500 and 5600 levels as indicated by aggressive call writing of the 5500 and above strikes and buying of the 5400 and
There is heavy resistance at the 5500 and 5600 levels as indicated by aggressive call writing of the 5500 and above strikes and buying of the 5400 and below strikes puts
S&P nifty & nifty future and Futures & Option segment volumes
Source: NSE
Source: NSE
Source: NSE
As expected the market turned to profit booking mode after a long period of one sided rally up. The rising crude oil prices threatened to further widen the government's trade deficit. Oil advanced for the seventh day in a row on Friday, 24 February 2011, the longest winning streak since January 2010. Nymex crude oil for April delivery hovered at $108.31 a barrel in Asian electronic trading on Friday, 24 February 2012. While the market was due for some correction, the liquidity driven rally would continue for some more time perhaps after some consolidationnow, as the Euro zone crisis eases and most of the countries introduces further economic stimulus in various forms.
The domestic market is expected to rally at least till the budget on expectations of various reforms announcements. It's a know fact perhaps that the current rally is a liquidity driven one and there is no visible improvement in the real economy world over.
The previous week was that of profit booking as longs were cut during the expiry and fresh shorts were created on Friday, thus indicating perhaps some more correction. The S&P nifty for the week ended 24th February 2012 fell 135 points to close at 5429.30, while the nifty future of the March series closed at 58.15 points premium to the underlying at 5487.45. Such high premium for the nifty future indicates steep selling in the cash segment.
The March series nifty future added 14.59 lakh shares in open interest (OI) on Friday to take its total OI to 2.54 crore shares. For the full week, the nifty march future added 1.83 crore shares in OI and most of the additions were on the short side. The good thing is that Foreign institutional investors (FIIs) figure continued to be positive. In the nifty march option segment, there was aggressive call writing of the 5500 and above strikes, while the 5400 and below strikes witnessed aggressive buying indicating heavy resistance at the 5500 and 5600 levels for the underlying. Going ahead we may witness horizontal to negative move as the market consolidates at these levels for some time. The average volume during the week under review was higher at Rs 180902.02 crore as compared to Rs 140512.26 crore during the previous week.
F&O segment-wise volume analysis
Source: NSE
The put-call ratio of index options on Friday rose to 1.17 as compared to 1.13 the previous trading day. The stock put-call ratio fell to 0.48 as compared to 0.66 the previous day. The market wide put-call ratio remained unchanged at 1.11 on Friday as compared to the previoustrading day.
Open Interest (OI) break-up as on 24th February 2012
| Open Interest (OI) break-up as on 24th February 2012 | |||
| Open Interest (OI)* | Change** | Change# | |
| Market wide | 207.77 | 11.49 | -70.45 |
| Index Future | 3.02 | 0.16 | -0.56 |
| Stock Future | 178.17 | 4.96 | -26.23 |
| Index Options | 9.55 | 0.62 | -6.25 |
| Stock options | 17.02 | 5.75 | -37.42 |
| * No of shares in crores ** Change is vis-à-vis previous day # Change is vis-à-vis previous week Source: NSE | |||
The market-wide OI on Friday stood at 207.77 crore shares, 11.49 crore shares higher than the previous trading day. The stock futures and index options segment added significant OI indicating short buildup in various stock future counters. (See the OI break-up table)
Most active Nifty options (March 2012 series)
| Most active Nifty options (March 2012 series) | ||
| Open Interest (OI)* | Change# | |
| Call | ||
| Nifty 5500 | 3027300 | 425350 |
| Nifty 5600 | 2810200 | 264750 |
| Nifty 5700 | 3009600 | 636250 |
| Nifty 5800 | 2691900 | 465650 |
| Put | ||
| Nifty 5000 | 3987300 | 328650 |
| Nifty 5100 | 3536100 | 355050 |
| Nifty 5200 | 4784050 | 570300 |
| Nifty 5300 | 5395550 | 833600 |
| # Change is vis-à-vis previous day Source: NSE | ||
5500 and up strike call option of the March series witnessed aggressive writing as the market broke the psychological 5500 levels. So expect huge resistance for the market at the 5500 levels. On the other hand 5400 and below strike put option added OI due to aggressive buying.
The 5500 and 5700 strike call option added 4.25 lakh shares and 6.36 lakh shares in OI during to writing to take their total OI to 30.27 lakh shares and 30.1 lakh shares respectively.
The 5600 and 5800 strike call also added OI due to writing, The 5300 and 5200 strike put added 8.34 lakh shares and 5.7 lakh shares in OI due to buying to take their total OI to 53.96 lakh shares and 47.84 lakh shares respectively. (See the most active nifty option table)
Open Interest (OI) of major March 2012 series stock futures as on 24th February 2012
| Open Interest (OI) of major March 2012 series stock futures as on 24th February 2012 | |||
| Open Interest (OI)* | Change** | Change# | |
| Reliance | 1.23 | 0.05 | 0.90 |
| Tata Motors | 3.83 | -0.08 | 1.82 |
| RCOM | 4.04 | 0.03 | 2.93 |
| SBIN | 0.47 | 0.01 | 0.27 |
| Tata Steel | 1.20 | -0.02 | 0.76 |
| * No of shares in crores ** Change is vis-à-vis previous day # Change is vis-à-vis previous week Source: NSE | |||
Top 10 Open Interest (OI) gainers in March 2012 series stock futures on 24th February 2012
| Top 10 Open Interest (OI) gainers in March 2012 series stock futures on 24th February 2012 | |||
| Scrip Name | OI* | Change* | % Change |
| BOSCHLTD | 12000 | 6750 | 129 |
| PATNI | 166000 | 78000 | 89 |
| OFSS | 269875 | 84375 | 45 |
| IGL | 429000 | 128500 | 43 |
| COLPAL | 147750 | 40250 | 37 |
| BEL | 78000 | 16750 | 27 |
| ARVIND | 6160000 | 1312000 | 27 |
| IRB | 1604000 | 336000 | 26 |
| JETAIRWAYS | 1487000 | 292000 | 24 |
| DHANBANK | 5500000 | 816000 | 17 |
| * No of shares Source: NSE | |||
Top 10 Open Interest (OI) losers in March 2012 series stock futures on 24th February 12
| Top 10 Open Interest (OI) losers in March 2012 series stock futures on 24th February 2012 | |||
| Scrip Name | OI* | Change* | % Change |
| VOLTAS | 3050000 | -642000 | -17 |
| CUMMINSIND | 135500 | -25500 | -16 |
| SYNDIBANK | 1300000 | -164000 | -11 |
| TATAGLOBAL | 6144000 | -676000 | -10 |
| BGRENERGY | 794000 | -86000 | -10 |
| BOMDYEING | 367000 | -31000 | -8 |
| LITL | 58236000 | -3432000 | -6 |
| SUNTV | 756000 | -40000 | -5 |
| BEML | 146000 | -7500 | -5 |
| PATELENG | 1776000 | -90000 | -5 |
| * No of shares Source: NSE | |||
Lots of events to watch out for going ahead, that would provide a clear direction for the domestic indices. First is the result of the state election (especially Uttar Pradesh) and then the RBI policy meet on March 15th followed by the budget in March 16th. So expect some more profitbooking in the market leading up to the budget period.
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