Derivative market update
Despite opening negative Nifty surged higher but was not able to maintain its gains. It concluded the day with a minor loss of 8 points at 5412. Nifty consolidated after hitting fresh 5 month high yesterday. From technical perspective, a consolidation after decent rally is always a healthy sign and signifies the underlying strength of the uptrend.
Nifty marginally fell short of the target of 5440 as it tested the level of 5433 and succumbed to selling pressure to conclude the day with a loss of 8 points at 5412. In the immediate term the level of 5440/5500 levels would now serve as a resistance for Nifty whereas 5350 continues to remain as a critical support. As long as Nifty sustains above 5350 the above mentioned levels may be tested on the upside.
Short term trend still looks bullish; however traders should maintain 5350 levels as a stoploss for existing long position. In case Nifty breaks 5350 level of we may see further decline till 5230.
Nifty August 2012 futures closed at 5431.10 on Wednesday at a premium of 18.25 points over spot closing of 5,412.85,
Nifty September 2012 futures were at 5457.70 at a premium of 44.85 points over spot closing.
Nifty August futures saw a contraction of 0.25 million (mn) units taking the total outstanding open interest (OI) to 26.13 mn units.
The India VIX witnessed contraction of 1.84% at 16.00 as compared to its previous close of at 16.30 on Tuesday.
The Nifty Put Call Ratio (PCR) OI wise stood at 1.85 for August -month contract.
Nifty calls, 5500 SP from the August month expiry was the most active call with an addition of 0.16 million open interest.
Nifty puts, 5300 SP from the August month expiry was the most active put with an addition of 0.07 million open interest.
The maximum OI outstanding for Calls was at 5500 SP (10.02 mn) and that for Puts was at 5300 SP (10.74 mn).
Long positions were witnessed in stocks like MTNL & JETAIRWAYS
Short positions were witnessed in stocks like TTKPRESTIG & BALRAMCHINI
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Source: LKP Securities