Market Outlook for the month of October,2011

October 11, 2011   ·   0 Comments

Last week we observed that 4300 put has adding significant open interest along with at-the-money puts and implied volatility was increasing, indicating buying of puts was happening. Now we are witnessing unwinding in this put with fall in IV. Also in calls despite there being strong resistance of 5100-5150 we are seeing rising activity in 5200 strike. We take this as positive signal and refrain to suggest forming any short positions for time being.

www.stockssavvy.comSlowly but steadily FII’s are now buying in cash market segment which is quite encouraging. They continue to cover their short positions in index futures and for a change they were inactive in index options on net basis. Bears who wrote 4800 and 4900 calls in anticipation of steep fall are now covering those positions and also out-of-money put options are seeing unwinding of positions. 4900 and 5000 puts are now attracting writer’s attention.

Highest Open interest for Nifty is at 4800 & has a feeble support. We may just move in a range for October series & consolidate in the range of 4800- 5200. No considerable resistance is observed which means bears are not targeting to bang the market in short term. Neither we are having a strong support at 4800 levels, buying conviction could have evolved. We will stick with our buying pattern whenever Nifty goes below 4800 levels. Accumulation should go at these are very good levels to get in the market.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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