Trading ideas for 12/08/2011

Trading ideas for 12/07/2011(Friday)

Nifty moving in sideways for direction break of 5070 or 5210 will give further direction while i feel it may break upside but i will sell my calls even for small profit.

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FII DERIVATIVES
Index Future	Index Option	Stock Future	Stock Index
-29	+327	-362	-8
FII Cash	-59
DII Cash	+266

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India VIX : 29.09
Call OI : 48399050
Put OI : 48884350
PCR : 1.010
SMR : 28.80

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Intraday support and resistance:

S2	S1	Pivot	R1	R2
5082	5110	5152	5177	5213

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• Nifty Open Interest for August stands at 2,26,85,000 up by 53,850 with decrease in price (Short Buildup)

• Bank Nifty Open Interest for August stands at 13,62,575 up by 12,600 with decrease in price (Short Buildup)

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For 12/08/11 NF may take support at 5115

Above 5180 NF may rally up to 5225

Below 5110 NF may correct up to 5070

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OPTION DATA ANALYSIS

As per OI Table put writing was seen at 5000 and 5100 while not much call writing was seen.not much activity in OI table. while 4600 put had a huge unwinding and 4700 put had a huge addition. could be some one may be buying 4700 put in anticipation of a fall.

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Expected Bullish Stocks For 12/08/2011: EXIDEIND, ARVIND, PIRHEALTH, RPOWER, RCOM.

Expected Bearish Stocks For 12/08/2011: TATAPOWER, PNB, JETAIRWAYS, FINANTECH.

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NIFTY VIX

• VIX above 60 are dangerous levels. Markets will be highly unpredictable. If Markets are on a high (Nifty P/E above 24), then its advisable to exit the markets completely. Markets may be hot and totally bullish, but will most likely face a darker correction. Its just a question of time.
• VIX below 20 mostly indicate a more stable markets, purely because the volatility is less. It does not mean that markets wont fall. It just means that markets will follow predictable fundamental supports and resistances.

SMR = Smart Money Ratio (India VIX / PCR)

SMR is a measure of fear in the market. A value of less than 20 indicates that market is lack of fear and volatility and the higher PCR ratio(greater than 1) supports such kind of action. And a value of 60 or greater than 60 indicates too much of fear in the market which is highly motivated with lower PCR ratio (less than 1). It is a kind of indicator which provides information about which kind of market we are right now.

Put/Call Ratio

Put/call ratio (or put-call ratio, PCR) is a technical indicator demonstrating investors' sentiment.[1] The ratio represents a proportion between all the put options and all the call options purchased on any given day.

The market has bottomed when PCR was around 0.8-0.9 and topped when it was 1.2 or above.

HOW TO INTERPRET THESE VALUES

SMR with a value less than 15 indicates the market is lack of fear and volatility and along with high PCR ratio more than 1 supports such kind of action. And a value of more than 25 indicates too much of fear in the market which along with lower PCR ratio of less than 1 confirms it. It gives the mind of players in the market.