How to trade in nifty on 4 Jan

By | January 3, 2013

FII

1. FIIs bought 14480 Contracts of Index Future (NSE Nifty Futures and Bank Nifty Futures combined),worth 433 cores with net Open Interest increasing by 5018 contracts.

2. As CNX Nifty Future was up by 4 points with Open Interest in Index Futures increasing by 5018, so FIIs have initiated  longs in Nifty and Bank Nifty Futures.Today was interesting as Bank Nifty remained in red for most part of session so Banks are under performing the nifty. So highs should be treated with caution.

3. NS closed at 24 month high 6010 after making high of 6017 (Almost near to our resistance level of 6018 as discussed yesterday) and low of 5987.Nifty has crossed two major resistance 5930 and 5965 with gap ups and these gaps remains unfilled. But as these are not runaway gaps so Nifty should pull back and fill these gaps.Trading Principles:Success & Failure in Trading http://bit.ly/135B3DQ

4. Resistance for Nifty has come up to 6020 and 6035 which needs to be watched closely ,Support now exists at 5982 and 5951.Trend is Buy on Dips till 5920 is not broken on closing basis.

5. Nifty Future January Open Interest Volume is at 1.71 cores with liquidation of 0.03 lakh in Open Interest, Cost of Carry of Nifty Future came down to 6.We saw slight liquidation in OI with Cost of carry coming down signalling traders are closing longs in nifty future.

 

 

 

 

 

 

6. Total Future & Option trading volume at 0.71 lakh Cores with total contract traded  at 1.02 lakh, PCR (Put to Call Ratio) at 1.05 and VIX at 13.47. We saw the rise above 6000 but contracts traded has NF has not even crossed 1.5 lakhs from start of year. Volatility is compressed and expansion will come soon with rise in volume.Cash market volumes are highest today in Jan series so if 6020 is not broken it can be case of distribution at higher levels.

7. 6200 Call Option is having highest Open Interest of 80.6 lakhs with addition of 6.3 lakhs in Open Interest, 6300 Nifty CE  is having second highest OI at 52 lakh also saw addition of 2.2 lakhs in OI,6100 Call Option added 1.96 lakhs in OI with Option premium at Rs 53, Call at all the strike prices have closed almost 5-10% lower from open prices suggesting selling call options  .5700-6300 Call Options added 7.6 lakhs in OI.

8. 5800 Put Option is having Open Interest of 58.5 lakhs with liquidation of 1.2 lakhs in OI so firm base is set up at 5800 and 5900 Put Option added 6.6 lakhs with OI at 56.5 Lakhs,6100 PE added another 6.3 lakhs in OI suggesting bulls are contemplating higher levels of 6100 .5700-6300 Put Options added 14.6 lakhs in OI.Bulls are in control as per option analysis.

9. FIIs buying in Equity in tune of 1397.3 cores and DII sold 905 cores in cash segment,INR closed at 54.70 Live INR rate @ http://inrliverate.blogspot.in/).

10. Nifty Futures Trend Deciding level is 6044(For Intraday Traders), Trend Changer at 5986 NF(For Positional Traders). (Above this Level Bulls will rule Nifty/Below this levels Bears have upper hand). Bank Nifty Future Trend Changer Level 12693.

Buy above 6020 Tgt 6035,6050 and 6077

Sell below 5980 Tgt 5951,5937,5920(Nifty Spot Levels)

Disclaimer: These are my personal views and trade taken on these observation should be traded with strict Sl

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