Archive for November, 2010
After the bearish expiry week, more of correction was seen last friday as the new series began.
There has been build up in both the near strike puts and calls and 5600 puts and 5800 call and 6000 call saw good build up in open interest. PCR ratio is at 1.11, slightly favouring bulls.
Overall, markets is showing few signs of a short term up move till 5850 levels and beyond and it is a buy on any correction at this stage.
Yesterday again 5985 levels proved to be a strong resistance and bears took complete control from there on and pushed Nifty towards the low of the series around 5826.
Overall markets have opened strong for the day and is hovering near to 5900 levels. Strong resistance exists at 5934 and it is unlikely for markets to break the barrier for the day.
On the bottom side, 5864 is providing support. So it is likely that markets will hover between the levels of 5864 and 5934 for most of the day before bearishness sets in.
There might be a final bearish move for the day, with ONGC correcting significantly.
Bears totally dominated the expiry week after the expected bounce that we saw on monday. Yesterday again Nifty tested
Bears took control initially in yesterday’s session and pushed markets to test the key level of 5826 mentioned in http://tripleint.blogspot.com/2010/11/bears-to-take-control-from-here-on-till.html which also happened to be the day’s low.
The swift up move which came in the later half of the session yesterday is giving a neutral stance in the penultimate session for the series.
There were increase seen in 5900 and 6000 calls which at this stage again favors bears to a good extent. PCR is almost neutral at 1.08.
Yesterday markets saw a strong bounce and a close above 6000 levels and bears might take control from today for this expiry if a break of 5950 levels happens initially.
Options saw huge accumulation in near strike puts and unwinding in ITM calls. There was a wild shift during intraday in implied volatility swinging in favour of bulls and bears alternatively.
Any break of 5985 levels would initially favour bears to a large extent today and a subsequent break of 5950 should see a strong correction towards the levels of 5876.
Last week saw markets correcting around 3% to close the week at 5890, a lowest close in nearly two months.
Pattern-wise, it favors bears to a good extent after a complete bearish engulf the previous week. Over the week, options saw implied volatility skew in puts and puts were trading much cheaper when compared to the calls and right now the skew has shifted and is favouring bulls for this session.
Overall bears still have an upperhand and any upmove of today might be followed by a strong correction in the subsequent session.
On friday, there were strong increase in open interest in all the near strike calls and going forward 5985 might act as a strong resistance level for this series.
Yesterday markets saw testing further lower support of 5907 and then bounce back towards 6000 levels.
Options data saw unwinding in 6000 and higher strike puts and strong increase in OI of 5900 puts. There were also some increase seen in 5900 call and 6200 calls.
Overall due to the increase seen in 5900 puts, there is a perceived view that markets will get strong support at that level. It is likely that markets will break 5900 support before the close of this series and bears might push markets further low to levels of 5826. The implied volatility in puts in very less when compared to the calls and this could be one reason for bears to push markets lower breaking support levels.
Markets after testing and closing below the 20 DMA in the earlier session at 6072 regained some of that in yesterday’s session to close just a shade below the 20 DMA resistance level of 6131.
It looks like today’s session will be crucial to decide the short term trend and markets might turn bearish after any initial up move in the later half of the session.
Options data saw accumulation in near strike puts and overall puts still have a lesser implied volatility compared to calls and there is a chance for markets to test lower levels before the close of this series.