Nifty trade may remain range-boundThe Nifty June series’ open interest is about 2.83 crore shares, slightly greater than the open interest of the May series on the first Tuesday level of 2.78 crore shares.
Overall rollover data indicate the relatively poor level of participation from market participants. However, global cues will continue to influence domestic indices.
A move below the lower support of 4900 may see the index decline to 4700 levels. The Nifty basis remained in the discount and finally closed at a discount of 30 points. However, 15 points from it can be attributed to declared dividends which go ex-dividend in June. Put-call ratio of open interest increased and closing at 1.36 levels, indicating put writing in OTM strikes. Options’ open interest saw an addition of positions in OTM strikes.
The option concentration shifted to the 5100-strike call option with an open interest of above 58 lakh shares followed by 4800-strike put option with above 58 lakh shares in open interest. Above option concentration indicates toward the range of 4800-5100 in the near term.
The implied volatility (IV) of call options increased and closed higher at 26.50% on Tuesday, while the average IV of put options ended at 28.65% indicating some buying interest in ATM put options.
The Nifty is expected to remain in the range of 4800-5100 and only a breach below this range will drag the index to lower support of 4700. Sectorally realty and metals stocks observed short positions, while banking and sugar has seen long unwinding and Fertiliser stocks has seen long addition.
By Nitin Murarka, Head, Derivative Strategy, SMC Global.
Top 5 picks of the day |
Mid term picks Trading CallsPost non-compete clause, RIL to invest in power sector****************************
Heard on the street TRIL rises as Siemens seen keen on stake buy Market talk that power major Siemens India is likely to pick up a stake in Transformers & Rectifiers (India) (TRIL) has seen the company’s share price move from Rs 405 on May 27 to its current level of Rs 416 on Tuesday. The buzz on Dalal Street is that law firm Amarchand Mangaldas is doing the due diligence for the company. When contacted, TRIL’s CMD Jitendra U Mamtora denied any such move and termed it as market speculation. An email sent to Siemens India elicited the response that the company does not comment on market speculation. Analysts maintain that TRIL, which recently expanded capacity by three times, is expected to register good growth for FY10-11. The company has a decent order book and the company’s growth will be driven by large-scale demand for power and distribution transformers in India actuated by the huge power generation capacity addition plans. Tech Mahindra gets support from a local MF Institutional buying interest was seen in select IT firms in a falling market on Monday. The buzz is that a domestic mutual fund owned by a large business conglomerate in the financial services sector was a buyer in Tech Mahindra. On the BSE, the stock closed at Rs 637.65, up marginally by 0.20% supported by above average volumes, but has lost more than 15% in the past one month. Analysts maintain that sustained volume traction from non-British telecom clients would generate higher revenues and margin improvement, coupled with positive news flow on client retention, new deal wins and favourable settlement with Upaid, provide comfort on the future business prospects. The stock is also trading at attractive valuations compared to peers and has a “buy” from most broking firms. Ratnesh Kumar may join StanC as equities head There is more churn taking place in the local broking industry. Ratnesh Kumar, CEO of institutional equity at Anand Rathi, is said to be moving out of the firm. He is tipped to join Standard Chartered as the head of equities. The buzz is that a few senior colleagues of Ratnesh Kumar at Anand Rathi Securities may also follow him. Ratnesh Kumar was roped in by Anand Rathi in 2008 to build the institutional equity business.
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Src: Economictimes and DP blog and etc. |
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