Trading ideas for 8/08/2011

Trading ideas for 8/08/2011(Monday)

Some positional shorts were covered while intra shorts were covered in the day itself. No new shorts were created on friday while still shorts are pending. PCR going low and SMR going up. Caution required for new shorts. SL for shorts could be 5235 spot.

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FII DERIVATIVES
Index Future	Index Option	Stock Future	Stock Index
+81	+1001	+316	-19
FII Cash	-1788
DII Cash	+1372

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Call OI : 46507600
Put OI : 38098050
PCR : 0.819
SMR : 30.40

India VIX : 24.90

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Intraday support and resistance:

S2	S1	Pivot	R1	R2
5070	5140	5185	5252	5298

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• Nifty Open Interest for August stands at 2,31,87,950 down by 4,43,850 with decrease in price (Some positional shorts are covered along with intra shorts taken around 5185 too covered)

• Bank Nifty Open Interest for August stands at 13,73,600 up by 97,775 with decrease in price (Short Build-up)

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For 8/08/11 NF may take support at 5175

Above 5235 NF may rally up to 5275

Below 5175 NF may correct up to 5120

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OPTION DATA ANALYSIS

As per OI Table huge call option of 5100, 5200 and 5300 were written while.put option were written below 5000 and short covering seen in 5100, 5300 and 5400 put.

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Expected Bullish Stocks For 8/08/2011: BPCL, IDEA, OIL, NMDC.

Expected Bearish Stocks For 8/08/2011: COREPROTEC, GLAXO, ONMOBILE, KSOILS,VIDEOIND.

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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.