The market's have opened within friday's value and have been quickly rejected near the 5466 level we have been watching.
On the lower side, 5423 is the first line of support.
As on friday, for the upward momentum to return, 5466 and then 5486 have to be taken out.
But also noted is the fact that there was no significant selling in the 5423-5430 zone.
On another note, on expiry weeks Reliance Indutries generally does well at the start of the week.
Look to buy above 1062 as a swing trade set-up.
I will put up a chart shortly.
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10.30
Expiry week :
There are normal weeks for trading and then there is an expiry week.
I have always looked at the expiry week as a "special" week to trade and have made different rules for it.
Most of you would be familiar with our expiry calculations of the Nifty based on the VIX.
In expiry weeks, I also recommend the buying of stock and index options which I would not do on any other week simply because the NSE is not very liquid in stock options despite having the Nifty which is the No 2 traded future in the world.
In expiry weeks, time premium as a factor is out of the option math, and if you are clear on the direction, it is very easy to take a leveraged call ( or put).
I have also noted the behavior of certain stocks to be a bit different in this week, irrespective of the trend they may be in.
Now there are no certainties, only probabilities for us to take our trades.
One such stock is Reliance. It is my observation that a large percentage of times, the stock does well in the first part of the expiry week.A back test has yielded good results even when the Nifty has been drifting down.
Have a look at this chart too :
Notice the high vol region around 1057 levels.
Using that as a support the stock can move higher to 1074 and 1090.
Value area low for friday was 1062.
As mentioned, traditionally too the stock has done well at the start of the expiry week.
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10.57
Value areas :
10036-10060-10083 for bank nifty
5442-5453-5465 for Nifty.
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13.04
SBIN:
SBI was a very bad trade.
Trying to pick a bottom is in itself bad.
Perfect trend day in the stock.
My reasoning was that the consolidated value ( 2 yellow lines) would support the price at 2441-2444.Instead it moved swiftly in the other direction taking our stop at 2436.
The seller has been strong since morning in the stock and has been in control as what happens in a trend day.
Looking ahead 2418-2425 should be a reference level now.But not a candidate for longs at all.
In a trend day, we do not take an opposing view. Lesson learn't again.
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3.20
US futures currently at 1099 levels, above the value area high of 1097 from friday.
1096.5 is also the level where the seller was overcome.
Looking for that level to hold up in day trade today over there for a target of 1129 and 1159.
Nifty has got strong supports in the 5408-5411 region.I won't think of shorts till that level is broken down.
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Posts
55 comments:
Good Morning Shai & Viren!
GM Shai, RM and folks!
Update from Options/Futures/Rollovers ... (Sorry its a long one)
http://1.bp.blogspot.com/_xQfPkpQXjMc/TExdeTsZgGI/AAAAAAAAAqw/WX2LM1v6HXs/s1600/OI_analysis.GIF
Notable points from Friday's Options action:
1. 5500 is still tough to achieve this expiry - 1.23Cr OI is decently big
2. 5400 puts adding 10L+ and 5400 Call covering - strengthens the case for 5400+ expiry
Nifty Futures-
1. OI:
July: 3.03Cr OI down 4.2%
August: 65L OI up 33%
2. Rollovers:
13.4L shares cut from July
16.5L shares added to August -- Rollovers on the higher side
Comparison with June - the Friday before expiry we had Total OI of 3.3Cr whereas now the OI is almost 3.7Cr - almost 13% bigger now!
BankNifty Futures-
1. OI
July: 23L OI down 0.17%
August: 4.7L OI up 36%
2. Rollovers:
0.17L shares cut from July
1.25L shares added to August - Definitely heavy rollovers!
Comparison with June - the Friday before expiry we had total OI (June+July) of 21L whereas now the total OI of 28L (July+August)
From http://oitracker.blogspot.com/
HIGH OPEN INTEREST AT MARKET TOPS IS A BEARISH SIGNAL IF THE PRICE DROP IS SUDDEN, SINCE THIS WILL FORCE MANY 'WEAK' LONGS TO LIQUIDATE. OCCASIONALLY, SUCH CONDITIONS SET OFF A SELF-FEEDING, DOWNWARD SPIRAL.
AN UNUSUALLY HIGH OR RECORD OPEN INTEREST IN A BULL MARKET IS A DANGER SIGNAL. WHEN A RISING TREND OF OPEN INTEREST BEGINS TO REVERSE, EXPECT A BEAR TREND TO GET UNDERWAY.
Good Morning Girish!
Thanks for OI inputs.
Girish,
Yes very good inputs.
5500 would be very difficult to scale.
On expiry day, we have to see how the market reacts to these levels. Last expiry, the market made a run at the writers at 5200 in the last hour, then a very secure level.
Dear Grish,
Very good analysis.Can you pls give the link for tracking OI Nifty futures.
Regards,
Veer
RM,
Over the weekend, I downloaded Amibroker and applied the MP AFL from the link you provided last week. With my quotetracker cash market feed it seems to be working.
Paid for one month FnO data feed from MDP (yet to be contacted by them). So in a couple of days I might also join the 'MP club'
One question - which version of Amibroker should I buy - Standard or Professional?
Gm Shai , Viren & all Blogmates
Veer,
Here's a very decent site that puts up the summary of OI changes ad EOD:
http://www.stocksfortune.com/FOReport
This is THE link from NSE:
http://nseindia.com/content/fo/fo_contractsdata.htm
It works for Index/Stock Futures and Options whatever that is traded in FnO.
Dear Grish,
Thanks. I have purchased Amibroker - Professional Edition with Amiquote and AFL codewizard. But yet to use and utilise to the full extent.
Regards,
Veer
Hello Every Body!
5427 from Friday revisted.
Longs can be initiated with a 10 point stop below 5427.
@Girish
I am using a doctored demo so hardly in a position to advise you. :)
@Shai
The AFL I use, does not give volume profile for first hour of trade. I have to switch to price profile till 1000 hrs if i wish to see the chart at all. Does that happen with your version of AFL too?
Good Morning Shai ......... Can i buy BN here
Girish,
The professional version has no limitations and a better long term candidate.
---
RM,
I spotted the problem with only my alternate IB feed. In esignal it does not happen.More to do with the data provider than afl.
--
@ All,
The link to the afl is in " Market profile Classroom".http://vtrender.blogspot.com/2010/05/forum.html
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Powertrade,
Safer buy is above 10036 for 10070.
---
Don't expect lots of vertical movement today.
Thanks Shai
i just Bought BN above 10036 shai ...
Thanks Veer. I plan to go for Professional version too.
RM, I also downloaded a free one but plan to upgrade in 30 days if I am happy with the setup.
Shai,
Thanks for AFL.
Abt your morning comment abt "run on 5300 Call writers" in last 1 hour of trade on June expiry day --
I have always seen that one of the call or put option will become a "lottery play" in the last 1 hour of trade - that too with 1:4 risk reward ratio.
Lets watch if such a play comes along this expiry!
Chart of reliance posted and some expiry musings!!
Hi Viren/Shai,
Please indicate VAH/POC/VAL values of NF & BNF?
Bose
Girish,
The run was on the 5200 PE writers that day in the last hour.
The amusing thing was that in the 5 hours of trading that day about 2 million shares were written at a nominal 2-4 rupees.
Most of them were forced to cover at 10-12 when the Nifty threatened a break down.
Value areas :
10036-10060-10083 for bank nifty
5442-5453-5465 for Nifty.
Dear Shai GM. so can we go long in reliance with 1055 as sl??
Thanks
Aa-ha,
Then there were two lottery plays:
5200PE & the second one was 5300CE
When Nifty went below 5300 (may be to 5280 - don't remember exactly), Golfdude and I were discussing on Skype to buy some 5300CEs at 5-6 rupees. Nifty expired at 5320 & 5300CEs @20
So there was a lottery play of 1:4 risk reward ratio
Here's the link of 5300CE price on that day:
http://nseindia.com/marketinfo/sym_map/symbolMapping.jsp?instrumentType=OPTIDX&symbol=NIFTY&expiryDate=24-06-2010&optionType=CE&strikePrice=5300&dateRange=1month&fromDate=07-06-2010&toDate=28-06-2010&segmentLink=9&symbolCount=2
Bizagra,
1055 is a good stop for intra, but I intend to hold for a while longer ( till wed/ thurs), so my stop is 1047.
5442.
If you took longs, we have just entered value.
So more safer now if we remain above this level.
Hi Viren,
Thanks for VA levels
Bose
Tomorrow Reliance Q1 number will comeout. Mostly they release after market hours.
RBI policy meet also in tom.
Dear Girish and Veer
I am using Amibroker professional version since last 5 months, I think Amibroker is the best software for technical analysis specially Volume and Price Profile Charts. Data feed can be taken from Invest Bull for all type of future and cash charts in RT mode in Amibroker just for Rs 500/- PM. I have esignal data feed also but esignal is very expensive ( Rs 8000/- PM), better to opt Investbull for all your need of Volume Profile and Price Profile Charts.
Yes Sara,
Thanks for the reminder. It's the 27th tomorrow.
staying above 5442, should go to 5456, 5466 and then 5486.
Offload if we do not auction above 5456.
Dear Pawan,
Thanks,
Veer
Markets having a little difficulty managing above 5442 which is value low from friday.
I'm still playing for 5427 to be supported as in friday's action.
But should it not, then 5408-5411 should emerge as the next line of support.
Thanks for your input Pawan.
I checked Investbulls.com - they don't seem to provide data for all 200 FnO scrips.
http://market-data-provider.com seems to claim that they provide all FnO stocks + Options for 14999 per year. I am trying this out for one month and will post some feedback here.
SBI is looking to move up...can take Bank Nifty along.
SBI fut can be taken here at 2443 with a stop at 2436, tgt 2458.
SBI Sl hit.
Exit.
SBI 2435
Seems not a good day for trade :) am always stuck with this kind of market.Nifty is also near to SL
SBI chart updated.
Guggu,
A part booking should have been done when value low broke at 5442.
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"Don't expect lots of vertical movement today"
July 26, 2010 10:19 AM
Posted in the morning, hence was looking at stock action.
Shai,
Shall I exit my long here at 5436?
yes.
There is not much happening.
We are below value for most of the day.
Guggu some positive divergence in seen no so we should go with what shai says that is stop below some points 5327
Shai,
I took short LT @1938 (Aug futures) this morning.
I didn't want to post here because the reason was not strong enough. Just based on charts (-ve divergence on 15-min) and the fact that AXISBANK and LT were the only two stocks that hit 52-wk high on Friday. My theory was that if Nifty is not making a new high today it would be decent to short the stocks that made new highs on Friday.
LT is reporting results tomorrow:
http://indiaearnings.moneycontrol.com/sub_india/results_calender.php?sel_date=2010-07-27
May be you can comment on LT (if you are not busy)
PS: I covered with 17 points gain (@1921) as I couldn't be on the terminal for a couple of hours.
I exit the nifty call @ 5427 finally
Interesting times for sure -
The largest bank in the country is down in excess of 3%. The largest auto maker in the country is down in excess of 12%. Numerous other stocks are taking hair cuts of 5-7%. Yet, the rock solid Nifty is down just about 1/2% (approx).
..
Girish,
Nothing definite in the profile action for LT.
But there is a sign that shorts of the morning are booking profits at 1918 levels.
Good call BTW.
It's been that kind of the day, where the best trade was a short at the open around the 5466 levels waiting to get 5427.
Thereafter it just has been 10-15 points random.
Shai,
Can i buy few of RIL for 2-3 days time?
US futures currently at 1099 levels, above the value area high of 1097 from friday.
1096.5 is also the level where the seller was overcome.
Looking for that level to hold up in day trade today over there for a target of 1129 and 1159.
Nifty has got strong supports in the 5408-5411 region.I won't think of shorts till that level is broken down.
Guggu,
I'm holding RIL which I initiated today and that's another trade not gone to plan.
I suggest waiting out till morning tomorrow for a fresh entry. I will put out the alert when I average.
Ok thanx! it was going down and down that is why i asked.
thanks to all of you! Bye for now
Bye Shai and friends.
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