Derivatives: Momentum selling may continue, while the market appears oversold

Stocks Which Can Bounce Back In Some Days !

Cairn India CMP 262, SL 245, Tgt 308 !

Unitech CMP 26.25, SL 24, TGT 30.50--33 !

Andhra Bank CMP 124, SL 113, TGT 144 !

Bearish positions continues to be build, but market to take cues from global market trend while RBI's move to tame inflation will have to be closely watched

The nifty 5000 and below strike call option of the September series added significant OI due to aggressive writing, while most of the out-of-the-money put strikes witnessed aggressive buying. The 5000-strike call option added 14.26 lakh shares in OI due to writing, to take its total OI to 53.47 lakh shares.

The 4600, 4700 and 4800 strike call option added 7.94 lakh shares, 6.24 lakh shares and 9.12 lakh shares in OI, to take their respective total OI to 9.18 lakh shares, 13.41 lakh shares and 25.30 lakh shares respectively indicating bearish positions. The 4400, 4500 and 4600 strike put option added OI of 14.12 lakh shares, 13.64 lakh shares and 10.30 lakh shares in OI due to buying. The total OI of these three strikes increased to 30.71 lakh shares, 41.40 lakh shares and 51.99 lakh shares respectively.

The momentum selling appears to continue for some more time, while there could be sharp pull back due to short covering as the market appears significantly oversold. The global market trend will remain the cue, while domestically the RBI's move to tame inflation will have to be closely watched. 

August (2011) : 
Open : 5527.50
High : 5551.90
Low : 4720.00
Close: 4747.80
Avg. : 5136.80

Yearly (2011) : 
Open : 6177.45
High : 6181.05
Low : 4720.00
Close: 4747.80
Avg. : 5456.58

NIFTY FUTURE 

R5 : 4840
R4 : 4816
R3 : 4796
R2 : 4780
R1 : 4762

CMP: 4748.70

S1 : 4736
S2 : 4718
S3 : 4692
S4 : 4676
S5 : 4748

Market Updates : 

Worries about introduction of QE3 in US and the domestic inflation and economic slow down concern weighed heavily on the domestic bourses as the Foreign Institutional Investors continued to dump Indian Equities. Interest rate sensitive sectors like Bank, Auto, Construction & Real Estate, Metals and capital goods segment saw sharp sell off. Perhaps the fears of sharp earnings downgrade for the front line players by major institutions caused the major sell off. Overall for the week the nifty fell 97.85 points to close at 4747.80.On Friday itself the nifty corrected 91.80 points. The nifty September future series on Friday added 26.21 lakh shares to take its total OI to 2.42 crore shares. The nifty September future on the other hand closed at a marginal premium of 0.9 points at 4748.70 on Friday.

In the futures and option (F&O) segment it was absolutely bear signals as fresh shorts were created in the index futures, while some of the long positions in the stock future segment were aggressively covered. Out-of-the-money strike call options witnessed aggressive writing, while out-of-the-money put strikes witnessed aggressive buying indicating the bearish mood. On Friday the nifty September future added 26.21 lakh shares in OI, to take the total OI to 2.42 crore shares.

The average volume in the F&O segment during the week was higher at Rs 168037 crore as compared to Rs 149006 crore during the previous week. Although the fundamentals still appears weak for the market in the medium term, there could be some pull back due to short covering as the market appears significantly oversold.

A broad-based market meltdown

Small-cap and mid-cap stocks were battered on the bourses today, 26 August 2011, extending recent steep losses.

At 15:19 IST, the BSE Sensex was down 306.42 points or 1.9% to 15,839.91. The BSE Small-Cap index, underperformed the Sensex falling 2.28% to 6,032.78. The BSE Mid-Cap index also underperformed the Sensex sliding 2.66% to 6,910.82

The market breadth, indicating the overall health of the market, was quite weak. On BSE, 2,280 shares fell and 610 shares rose. A total of 101 shares remained unchanged.

Note : Data From Capital Market And Money Control !

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