Trading ideas for 18/08/2011

Trading ideas for 18/07/2011(Thursday)



Nifty holding above 5020 will try to go above 5120 until then its sell on rise

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FII DERIVATIVES
Index Future	Index Option	Stock Future	Stock Index
-139	-240	+190	+13
FII Cash	-407
DII Cash	+169

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India VIX : 25.48 down by 0.98 points
Call OI : 50277050
Put OI : 48879350
PCR : 0.972
SMR : 26.21

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Intraday support and resistance:

S2	S1	Pivot	R1	R2
5966	5010	5060	5112	5162

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Nifty Open Interest for August stands at 2,23,79,100 down by 11,69,600 with increase in price (Huge Short covering)

Bank Nifty Open Interest for August stands at 16,90,175 up by 1,55,475 with decrease in price (Short Buildup)

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For 18/07/11 NF may take support at 5040

Above 5080 NF may rally up to 5125

Below 5010 NF may correct up to 4970

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OPTION DATA ANALYSIS


As per OI Table put writing was seen from 4800 to 5100 while calls were written at 5000 and 5200. Bulls are slowly building some base around 5000 and writing 5000 and below strike which will act a nice support for this series.

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Expected Bullish Stocks For 18/07/2011:SUNPHARMA, IDEA, RENUKA, COALINDIA, VIPIND .

Expected Bearish Stocks For 18/07/2011: BFUTILITIE, AXISBANK, BAJAJHLDNG , COREPROTEC .

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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.