Trading ideas for 26/09/2011

Trading ideas for 26/09/2011(Monday)

NIFTY FUTURE-CMP(4870.7) Yesterday the trend was BEAR In Sep series Nifty future shed 3.19 lakh position in Open Interest and this accounts to -1.34 % of Total Open Interest in Sep series.The Nifty Sep series is trading at 2.95 Rs premium to Underlying . In derivative cumulatively for all series contract Nifty future net added 4.82 lakh position in open interest and this accounts to 1.62 % of Total Open Interest in all series and cumulatively trading in average premium of 17.62 Rs to Underlying. The open interest is also increasing with trend

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FII DERIVATIVES
Index Future	Index Option	Stock Future	Stock Index
-446	-45	+367	+5
FII Cash	-1279
DII Cash	+765

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India VIX : 35.16 up by 1.28 points
Call OI : 44315150
Put OI : 52937350
PCR : 1.195
SMR : 29.43

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Intraday support and resistance:

S2	S1	Pivot	R1	R2
4770	4825	4875	4915	4970

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Nifty Open Interest for September stands at 2,37,04,200 down by 3,18,550 with decrease in price (Long Liquidation)

Bank Nifty Open Interest for September stands at 20,47,025 down by 21,150 with decrease in price (Long Liquidation)

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For 26/09/11 NF may take support at 4830

Above 4870 NF may rally up to 4915

Below 4830 NF may correct up to 4790

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OPTION DATA ANALYSIS


As per OI Table huge writing was seen 4700, 4800, 5000 and 5100 calls while short covering was from 4700 to 5200. Looks too bearish but shorting in these level is too risky with huge support is there in 4800 and 4700. Nifty covered 3.2L OI which is long liquidation.

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Expected Bullish Stocks For 26/09/2011:RUCHISOYA, RPower, UNIONBANK, IDFC, GRASIM, JPAssociate .

Expected Bearish Stocks For 26/09/2011: BEL, JISLJALEQS.

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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.