Happy New Year 2011

Team Vtrender takes the Opportunity to wish you all a happy and a prosperous new year 2011

Options/futures data for 30th Dec (EOD)

Summary:
1. Expiry did happen at 6100 - which I honestly think very few believed on the first day of the Nov series when we had a visit to 5750 or below! So in markets its often 'expect the unexpected and one gets rewarded to think differently than the entire crowd'. 
2. First day of series might probably not give the true picture of options so just   mentioning what's seen in the options table. 6000 seems to be the current support with 50L put OI
3. 6100 as of now is a 50-50 level
4. 6200 can be considered resistance
5. PCR is at 1.37 as per Sharekhan.com but calculations from raw numbers gives me 1.56 -- will confirm in the weekend


Nifty Futures:
1.9Cr OI up 37% (51L shares added) -- The series starts off with almost 20% lower OI than what Nov series started off with (about 2.5Cr).


Banknifty Futures:
13.9L OI up 12% (1.48L shares added) - The series starts off with almost the same OI as what Nov series started off with (about 14.1L)


Nifty monthly chart and some thoughts:

This is a 4 month chart of Nifty futures where we can see that there has been a confluence of monthly VAH/POCs 6090-6126 (well give another 20-25 points for inaccuracies in data feed and MP parameters calculation). So before getting carried away about double bottom @5750, be extremely watchful about that seller in the 6090-6126 range (make it 6080-6150)

Options/futures data for 29th Dec (EOD)

Summary:
1. Given that 6000 was a 50-50 level and the range suggested was 5900-6100 for this expiry, the bulls decided to strike when it really mattered and how did they strike? Just like the Indian bowlers (esp Sreesanth) who came out and bowled some absolute rippers when it mattered the most, bulls made two almost game changing moves for this expiry - forced 6000CE writers to cover (20L OI cut) and wrote 6000PEs (16L) as if they were distributing free candies.
2. 6100 is now the resistance for expiry
3. 6000 is now the support for expiry. Where it expires is anybody's game.
4. PCR up further from 1.46 to 1.57 - again what needs to be looked at is what's happening in Jan Options - Will make a detailed post over the weekend.


Nifty Futures:
Dec: 1.58Cr OI down 15% (29L shares cut)
Jan: 1.39Cr OI up 42% (41L shares added) -- Almost 30% higher rollovers into Jan series. And who says FIIs are off on vacation? They have bought 1500Cr (NET) in index futures yesterday and 1000Cr (Net) in Index Options too.


Banknifty Futures:
Dec: 7.9L OI down 21% (2.1L shares cut) 
Jan: 12.4L OI up 31% (3L shares added) -- Here too almost 50% more rollovers with a higher cost of carry. I had mentioned yesterday that increase in Open Interest will definitely give a directional move in next few days and BN definitely gave one yesterday with almost a 200 pointer. Its not over yet. Picture Abhi (probably) Baki Hai ... Without getting carried away, I am watching 11680 today and a decisive break of that can clear the path to 11780-11830 in next few days.


Monthly charts:

Options/futures data for 28th Dec (EOD)

Summary:
1. Well, the markets have gone nowhere in the last few days and not much updates to options table either. The range still remains 5900-6100 for expiry. The only folks who are smiling are the 6000 Short Straddle writers for December. What's interesting though is 5900CEs are unwinding very fast - almost 10-12L unwound in last 3 days. Do these writers expect an expiry close to 6100?? Even the 5800CEs have vanished quite a bit when this market has been going nowhere.
2. 6100 still the resistance with 83L calls vs 16L puts
3. 6000 is a 50-50 level with positive bias due to higher puts vs calls
4. 5900 is the strong support
5. PCR going up from 1.41 to 1.46 - doesn't have much significance now.


Nifty Futures:
1.87Cr OI down 6% (13.5L shares cut)
0.97Cr OI up 24% (19L shares added) -- Almost 50% new OI added to Jan futures with decent premium.


Banknifty Futures:
10L OI down 15% (1.85L shares cut)
9.5L OI up 80% (4.2L shares added) -- Again a large OI increase in Banknifty futures for Jan. I went back and checked the OI build up in next series during Oct/Nov expiries and it looks like a similar build up had happened. All I can say is a directional move does come after such build up. So keep an eye on the all important levels 11570 first and then 11680 on the upside. On the downside 11410-11370-11330 would be on watch for next few days. And remember - "Open Interest never lies" - because its got real money involved!

Options/futures data for 27th Dec (EOD)

Summary:
1. Not much happened in market yesterday and not much happened in Options world either. The range suggested by options for expiry is still 5900-6100
2. 6100 is the resistance. Some amount of put covering happened @6100 but that was not significant
3. 6000 is still a 50-50 level with +ve bias and 5900 is the strong support.
4. Not much change in PCR either - up from 1.41 to 1.42


Nifty Futures:
2Cr OI down 5.8% (12L shares cut)
78L OI up 14% (10L shares added) -- 20% less rollover to Jan


Banknifty: 
11.9L OI down 2.8% (0.35L shares cut)
5.2L OI up 43% (1.6L shares added) -- yet another day of blockbuster OI addition in Jan futures of Banknifty! As of now I am assuming these are longs in Jan futures. A move below 11330-11200 with more OI addition will invalidate that assumption.

Options/futures data for 24th DEC (EOD)

Summary:
1. Finally, Santa did come on Friday and took Nifty above 6000 barrier. The options action was pretty bullish too. The range suggested by options table is still 5900-6100 for this expiry. 
2. 6100 is now the resistance with 81L calls vs 19L puts - although puts are betting added slowly @6100
3. 6000 is now a 50-50 level with positive bias because of call massive covering/put writing action on Friday
4. 5900 has become a strong support now.
5. PCR jumped from 1.35 to 1.41!


Nifty Futures:
2.1Cr OI down 4.5% (10L shares cut)
68L OI up 14% (8L shares added) -- 20% less rollover


Banknifty Futures:
12.2L OI down 3% (0.4L shares cut)
3.6L OI up 22% (0.66L shares added) -- higher OI addition for the third day for BN. All I can say is that a bigger move is coming. Watch 11680 for a move to come on upside and 11330 for move on lower side.

Options/futures data for 23rd Dec (EOD)

Summary:
1. It was a quiet day in options land with Nifty moving in a very small range, all that was added was some 3L/4L of 6000PE & 5900PEs. The range of this expiry still seems to be 5900-6100 - unless something changes drastically in next few sessions
2. 6000 is still officially a resistance with 78L calls vs 58L puts - but puts are consistently getting added
3. 5900 is still support and recent activity of addition of 5900PEs continues
4. Lower Support @5800 remains reasonably strong, although some 5800PEs were covered yesterday which could be profit booking
5. PCR had a negligible increase from 1.34 to 1.35


Nifty Futures:
Dec 2010: 2.24Cr OI down 5.6% (13.4L shares cut)
Jan 2011: 59.8L OI up 30% (13.8L shares added) -- Almost 100% rolled over


Banknifty Futures:
Dec 2010: 12.6L OI down 2% (0.25L shares cut)
Jan 2011:  2.98L OI up 17% (0.43L shares added) - again higher rollover after blockbuster addition yesterday

Sideways - 2

Here is an updated chart I had posted last weekend calling for a sideways move in the market this week.You can find my last post here



The changes in the chart are in the heat map on the left which gives you the volume profile for the entire bracket of 5730-6092 and the new heat map on the right which is this week's volume profile.

As you can see from the red in the charts, there is a clear accumulation of volume at 6000 levels which would give rise to the possibility of a directional move coming from these levels.

Besides, the market put in a non-trend day today, which in itself will call for a large move to follow either immediately or the day following.

I was chuckling away when some TV presenters were attributing holidays, year end etc etc to describe today's action, but every profiler would be rubbing his hands in glee at the prospect of an eventful day coming up.

5930 or 6067 have a 50 % probability each from current levels and one of them would be definitely visited.The 6000 straddle will be a good bet with a 20 % stop loss in the front month options.The gains in one will exceed the 20 % loss in the other.

Options/futures data for 22nd Dec (EOD)

Summary:
1. Not much change the expiry range based on Options table. Its still 5900-6100 with notable action @6100CE - 20L added in last 2 days. Either its speculative call buying or 6000CE writers buying hedges, just in case Santa comes out to spoil their Christmas.
2. 6000 is still a resistance until another 15-20L calls cover.
3. 5900 is now all set to be a support for expiry.
4. Notable action @5800CE/5900CE - covering in these two options consistently for last 4-5 sessions suggests that the call writers have given up hopes of a lower expiry.
5. PCR up slightly from 1.32 to 1.34 - and leaves no hopes for bears for any sort of crash before expiry.


Nifty Futures:
Dec 2010: 2.3Cr OI down 4% (10L shares cut)
Jan 2011: 46L OI up 36% (12L shares added) - 20% additional rollovers


Banknifty Futures:
Dec 2010: 13L OI down 1%  
Jan 2011: 2.5L OI up 200% (1.72L shares added) - What the hell happened there? That's the second largest (single day) OI addition in Banknifty seen in last 3 months. That too coming in an illiquid next month contract? It comes with a 40 point premium. Some one suddenly bullish about Indian banks or were they just hedges? Whatever it is - those of us who love to trade Banknifty should be very happy to see such development!


What happened to RELIANCE and GAIL?
RELIANCE tanked with some more OI reduction. To me it looks like shorts are exiting in Dec futures as the rollovers are less to January and the cost of carry is higher in Jan futures.
GAIL - I am still looking for a bright green 52-wk high candle before the expiry. Long in cash from yesterday @509

BN and Market Profile

There is a reason why we all at Vtrender love to trade the Bank Nifty.

I used to be a Nifty trader till Vtrender happened at the start of this year and Shai's love for the Bank Nifty rubbed off on me so much that I trade the Bank Nifty today more than the Nifty.

Besides that it is so easy to work with the Bank Nifty if you are a profiler.

Consider today's high of 11680 which was the zone where the Bank Nifty had sold off earlier as also the weekly VAH to the point. Or the lows near 11440 which are Oct 26th lows pre bank Scams which were used to buy the market this afternoon.

If you study Profile and trade the Bank Nifty, you would get 8 moves out of 10 right each for 50-90 points without a directional bias in the market.

If you want to know how to do it, hold that thought, we will have a webinar early next month on the subject.

Let's look at the charts :



The market undid the good work of yesterday and for tomorrow 11520 will be the key.

Earlier this morning if you were on the chat box, you would have taken cues to book out longs partially- a signal which we gave live here at 9.36 this morning 20 mins after the market open with the Nifty then at 6040 and the Bank Nifty at 11680 !



Longs from 58XX levels are still safe as long as the Nifty trades above 5944 and the Bank nifty above 11320.As Shai had called over the weekend, we are in a sideways zone, and profits have to be booked before they get eaten up by the market.

This is also my last post this year as I head off for some R & R.

See you next year. Happy Holidays !

Options & futures data for 21ST Dec (EOD)

Summary:
1. From 10th of December, I have been highlighting the fact that there are not enough calls at strikes above 6000 which would lead to swift rise if 6000CE writers cover. Well, yesterday's action seems like someone is working to fill that space. 13L 6100CEs were written - making 6100 the immediate resistance if 6000CE writers are forced to cover. Also the the other strike where most OI was added (almost 14L) was 5900PE. With just one week left for expiry, someone seems to be trying to set the range of 5900-6100 for this expiry?
2. 6000 is officially still a resistance but probably needs one big push from bulls to force the adamant 6000CE writers to cover.
3. 5900 has now been upgraded from 50-50 level to support.
4. 5800 is strong support.
5. PCR has further jumped up from 1.27 to 1.34


Nifty Futures:
2.5Cr OI up 1.6%


Banknifty Futures:
13L OI down 2.6% -- All shorts added the previous day are cleared! Now 0.6L remaining from 15th Dec (high of that day was 11615)


Private Banks update -- Yesterday I mentioned watch for private banks. What's the score? ICICIBANK up 3.3%, AXISBANK up 3.5%, FEDERALBNK - didn't do much though


Watch to watch today? - Yet another big daddy and a sleeper stock in Oil and gas space
1. RELIANCE - December Fut OI down 22% in last 10 sessions and 16% overall down (6% rolled over to Jan)
2. GAIL -- GAIL OI is down 24% yesterday and 36% in last 2 sessions.

Options/futures data for 20th Dec (EOD)

Summary:
1. During that volatile session, most of options action was concentrated at two strikes 5900 and 6000. The bulls are doing the right moves but they don't look to be in any hurry to take this market up.
2. 6000 still a resistance and to be crossed successfully, it needs strong buying in Nifty futures, some 20L call covering @6000CE and another 20L put addition @6000PE
3. 5900 is still a 50-50 level, although bulls now have very good edge due to almost 9L 5900PEs added yesterday
4. 5800 is still strong support with 86L OI @5800PE and adding everyday
5. PCR up from 1.26 to 1.27


Nifty Futures:
2.4Cr OI up 3% -- Finally some sign of longs after only short covering last few days? Follow up action will confirm.


Banknifty futures:
13.4L OI up 2.75% -- Looks to be shorts again but the shorts in the last week have not been able to push prices much lower.


What I am watching this week? 
Three private banks - AXISBANK, FEDERALBNK & the big daddy ICICIBANK. There has been some decent OI addition in FEDERALBNK & AXISBANK
AXISBANK OI up 28% in last 5 sessions
FEDERALBNK OI up 45% in last 7 sessions


Watch for price action these stocks because to me "Open Interest = Trading Interest"

Normal Variation

The open of the morning was a test drive to check out the previous day's POC, to see if their was any unfinished agenda there.

Price was quick to reject the lower value and orderflow confirmed a long at 9.45 which was valid right upto day highs !

As expected in the later part of the day and posted in my view on thursday, the rotation between 5955-5990 happened in the later part of the day. My last post on the subject of rotation is here



The Nifty future has to defend 5944 tomorrow for an upmove above 5990 to materialize. The target in that case would be 6070.

The bank Nifty was resisted at 11440, which was pointed out by Girish in the trading room as support from 26/11.

After two unsuccessful attempts, the Bank Nifty took the path of least resistance which in it's case was downward.



In the process the BN put in an inside day today, which will call for a large move either tomorrow or day after.



The orderflow of the Nifty future is here :

Options/futures data for 16th Dec (EOD)

Summary:
1. 'A lot can happen over a coffee' - I am sure most of you know this saying from Café Coffee Day. And in exactly parallel manner, 'A lot can happen in last two hours of trading day'. And a lot did happen on Thursday afternoon - esp on options front. Bulls came out swinging at bears and sort of changed the look of options table yet again! 
2. The most important strike of this series has been the 6000 and specifically all eyes are on 6000CE writers. Bulls managed to force almost 10L call covering @6000CE and added 6.5L puts @6000PE. One more day of such action will clear the way to next resistances 6050-6090-6124 
3. 5900 truly has been a 50-50 level in the past few days, with bulls taking it home one day and bears another day. As of now its got a decently +ve bias.
4. 5800 is the strong support.
5. PCR went from 1.24-1.20-1.26 in last 3 sessions. Will it now stabilize and keep moving towards bullish side? 


Nifty Futures:
2.35Cr OI down 3% (7.7L shares cut) - That makes it 6% OI cut in last 2 trading sessions and 12% OI cut in last 5 trading sessions! Right now the move up has come only from short covering.


Banknifty Futures:
13L OI down 6.5% (0.9L shares covered) - Of the 1.5L shorts added on 15th Dec, 60% are covered. If BN Futures cross next resistance zone of 11590-11610, the rest of short should also cover.

Sideways

If you have been following profile charts, for the past few weeks you may have noticed that value has been going sideways for a few weeks now.

To illustrate the activity of the Nifty further, I picked up some bar charts and did some good old fashioned trendline analysis.

Have a look :



The chart is a 30 minute bar chart of the Nifty future for the past 30 days.

6097 and 5730 represent the extreme ends of the bracket we currently find ourselves in. Within this channel I have introduced two light blue horizontal lines ( on the right ) which define the path from the lows to a possible top of the bracket, the Nifty future took through the current week.

Also included are two heat maps based on volume profile.The larger heat map on the left is for the entire duration of the current bracket ( 6097-5730) and the one on the right is for the last 5 days of activity.

The black in the heat maps represent zones of low volume activity with the color gradient going to blue, green, yellow and red as the volume increases.This option helps us to get a visual display of high and low volume areas.

As you can see the extreme ends of the bracket ( black zone) have been quickly rejected and price hasn't spent a lot of time there, whereas the middle ( red/ yellow) is where the market has auctioned most of the time neat the 5950 zone.

So whilst we are within the blue channel, we are looking for signs to see if there may emerge a breakout based on the last five days of activity.

Unfortunately we can see a replica of the past 30 days in the last 5 days of data.

The red and yellow in the past week are exactly where they were in the past one month.

So the inference is that the sideways range in the Nifty would continue.

This market is an option writer's delight.

Responsive buyers appear

Two statements from last evenings post here

"5868-5863 holds the key in the Nifty tomorrow."

"The Nifty chart showed the presence of a buyer at 5925 levels"

The Nifty moved sideways till the afternoon and once the RBI news got digested the low at 5863 was bought and the Nifty finished a 100 points higher from there.



We have a full session of trading in international markets, before we resume again on Monday and lots can change from a sentiment point of view between now and then, but the damaging part of the afternoon move was that value was not created higher and the point of control stayed in it's place.

At the worst the bulls can hope for a rotation in the 5990-5955 low vol zone before a move higher, buy 5955-5945 will have to be defended.

The bank Nifty chart showed a buyer at 11180 early in the morning, and the fact that the market stayed above vwap was in itself a statement that the market would seen higher levels later, despite the news flow.



This market also has to stay above 11244 all of next week for it to move up again.

Options/futures data for 15th Dec (EOD)

Summary:
1. After looking at options writers flip-flopping every couple of days, I am tempted to use some expletives but will refrain as this is a public forum. Although there has been no cosmetic damage to the options table, there definitely seems to be some structural damage done to the options table. Massive sum of 25L puts covered at strikes 6000-5600, with the most (12.8L) covered at 5600PE.
2. By no cosmetic damage I meant that 5800-6000 remains the range, with 6000 the strong resistance
3. 5900 is a perfect 50-50 level now but with a negative bias due to put covering.
4. 5800 still remains the strong support, but the adamant call writers who wrote those 23L calls on 9th Dec have still not covered 12L yet.
5. PCR has now dipped to 1.20 but PCR at strikes that matter (5900/6000) is getting shaky.


Nifty Futures:
2.43Cr OI down 2.8% (7L shares cut)


Banknifty Futures:
13.9L OI up 12% (1.5L shares added) - That makes it 14% OI up for last two days and the largest 2 day OI increase seen in more than a month. The only time I have seen a 10% OI increase on a single day is on the Friday (9th Sep) before the big breakout in Banknifty (from 11380 to 11700+). And that OI increase was about 2.7L in 1 day.


What's the silver lining?
CNXIT is pushing for 20-month high. And here's another interesting stat - RELIANCE, INFOSYSTCH, LT are the three stocks with highest weight-age in Nifty. Together they account for 25.6% of Nifty's weight
Whereas - ICICIBANK, HDFCBANK, SBIN account for 16% of weight of Nifty.


Even though Banknifty is down almost 15% from its peak, Nifty is down only 5% from its peak. That speaks of the support the other stocks are giving to Nifty while the banks are pulling it.

Order Flow for today

Lots of queries, lots of emails and lots of discussion coming around the Order Flow systems we are employing in the Vtrender trading room.

A trader's forum has people inquiring about an "afl" for the system and elsewhere people are comparing it to moving average crossovers and what not.

We are amused.

We reserve our comments, happy in the belief that our traders are finding a way to "kick the habit of losing money in the markets".

I'm not even worried about the rate decision tomorrow. I'll buy the blue and sell on red.



The Nifty chart gave 5 trades today :



The bank Nifty chart was a simple sell at the morning, with a small whipsaw in the afternoon.



The 5 trades in the Nifty would have given you 80 + points today, enough to pay for an entire month at Vtrender !

The bank Nifty would have paid for a quarter with over 400 points on 1 lot.

Even if you trade one signal a day, rest assured you would not lose your subscription amount to Vtrender.

But then if you want to sit on the fence and keep analyzing, will you ever trade?

BN sells off ..

The open in the Bank Nifty was below Value low and the selling continued throughout the day. In the process the Bank Nifty closed below the weekly values too.



The purple dotted is value area low from yesterday and the large red PNF candle at 9.30 confirmed seller intentions.The initiative selling continued throughout the day and every rise was used to send the index even lower.Buying attempts at 11370 and 11300 were quickly decimated and the day belonged to the sellers by a margin !

For tomorrow as the market waits for the RBI news, it will be interesting to see responsive activity coming from buyers if there is an early morning sell off again.



The Nifty chart showed the presence of a buyer at 5925 levels.But once he was taken off it was difficult for the buyers to capture that level again.Prices however did make it to 5955 which was the previous days Point of Control as also the high of the day.

5868-5863 hold the key in the Nifty tomorrow.

Options/futures data for 14th Dec (EOD)

Summary:
1. Options table shows that bulls making decent effort to move Nifty higher. So far bulls seem to have made the right moves - put addition at 5700-6000, call covering at 5800/5900.
2. 6000 is the 'Wall of resistance' now with 82L calls vs 41L puts. If that's taken out, as of now it looks like there's actually less work needed at 6100/6200. 
3. 5900 is still a 50-50 level with positive bias.
4. 5800 is the strong support. There are still 12L calls remaining out of 23L calls added last Thursday. As of now my guess is that they are covered calls but bulls would hope for those calls to be covered soon.
5. PCR has now jumped to 1.24 because of more put writing at 5800-6000 than call addition at 6000-6200 & also due to calls getting covered at 5800/5900


Nifty Futures:
2.5Cr OI up 0.4%


Banknifty Futures:
12.4L OI up 1.8%  - After short covering for previous 3 sessions, finally some sign of longs? Only follow up rise above 11700-11800+ with more OI addition will confirm this.


One interesting chart:
As the saying goes 'a picture is worth a thousand words', will let this chart do all the speaking..

Balanced again.

The markets came back into balance again today through some bell shaped profiles in the Nifty and the bank Nifty today.

The Nifty put in a normal variation day and we have reason to watch for continuation tomorrow.

The market can flow back to imbalance in a day or two and create a large vertical move out of this zone again.

Here's are today's volume profile charts :

Nifty :







Value areas :

5959-5954-5937 in the Nifty
11631-11600-11554 in Bank Nifty.

Bells

The Nifty and the Bank Nifty future put in bell shaped profiles to finish the day today.

It was a sideways to an up day today with a lot of the volatility we have so gotten used to, missing from the action today.

Ahead of the Policy decision on Thursday, the Bank Nifty chose to operate in a 100 point range for most of the day.

What do you do when the Market decides to settle in a range?

You trade the range.

Easier said that done, as you do not know what is around the corner.The range which you know of, can easily crack when you take the trade and in the Bank Nifty it can send you off by 100 points in an instant.

Thank fully for us in the trading room, we have Shai's orderflow charts.

I managed 275 points in 4 trades between 12 noon and 3.00 pm today, by just following the green pink rule. Green for buying and pink for selling

Take a look :




*First Trade : Short from 11605, reversed at 11550 for 55 points
*Second Trade : Long at 11550, reversed at 11609 for 59 points
*Third trade : short at 11609, reversed at 11551 again for 58 points
*Fourth trade : Long at 11551. exited at 11654 for 103 points.

There was a fifth trade at 11654, which could have brought me 11580, but which I did not take. Also 4 other signals were generated before 12.00 and two of them would have given you 100 points plus.

No need of any Technical Analysis. It has been built in. Just follow the signals from the charts.

As Shai says we are truly on the way of letting people know that you can make money in trading and you can "kick the habit of losing money in the markets".

Options/futures data for 13th Dec (EOD)

Facing some issue with Google Gadget this morning - so no OI chart :(

Summary:
1. No significant structural change in options table from Friday's action except for 5800CE writers using the God sent intraday dip to cover 9L calls!
2. 6000 is still the resistance but calls seem to be adding reluctantly while some puts are also adding at 6000!
3. 5900 is still a 50-50 level with positive bias.
4. 5800 remains strong support. Of the 23L 5800CEs added on 9th Dec, 9L were covered yesterday. 
5. 6100/6200 calls covering continues. And if bulls manage to break the 'Wall @6000 (specifically 79L 6000CEs)' then it would give a swift move up


Nifty Futures:
2.5Cr OI flat


Banknifty Futures:
12.2L OI down 1.5% -- Actually this market is able to move 100 points in a matter of few ticks only because the OI is down almost 60% from its peak in August and more than 50% from its September breakout level.

Bank Nifty Order Flow of today

Added later:

Options/futures data for 10th Dec (EOD)

Summary:

1. Looking at options data on Friday, all I can say is that - option writers these days have become totally 'fickle minded'. With everyone following the herd (trend) like Sheep, we are having these 'RISK ON' and 'RISK OFF' days more often. The concept of trend used to be measured in months/weeks and now it seems that in less than one week we can have a trend and a trend reversal too. And looking at Banknifty, a trend can truly be measured in matter of hours!
2. Its very good that one of the readers of this blog 'alphabet1' commented about the weird activity @6000. I too found it interesting and dug in deeper into the 6000PE. Attached is last 15 day's action in 6000PE

Note that in 4 sessions when Nifty Fut crossed 5970 and stayed in the range of 5970-6090, 26L 6000PEs were added and in next 3 sessions when Nifty Fut tanked below 5970 till 5750s and reversed till 5890, 24L of those puts were unwound.  Lets now look at the story with 6000CEs

When NF fell from from 5970 to 5760, 25.8L calls were added and on Friday 20.8L calls were covered.
What can we conclude? As of now Nifty is back to the same situation where it was in the middle of last week. But if one gives priority to 'momentum' (NF rise, 5900 & 6000CE covering), it can be assumed that the market wants to move higher and hence the eagerness of call writers to cover. For this assumption to be validated, we need follow up action - NF rise, further call covering at 6000/5900/5800 and put writing at those strikes. Till then 6000 is officially a resistance.
3. 5900 is still a 50-50 level but now with a positive bias due to the massive call covering on Friday
4. Some more observations:
i) 5800CEs added 23L on Thursday and not a single one has covered yet. Are these Covered calls?
ii) This market seems to like 'Pig with lipstick' analogy. This time its in a reverse sense! Like we saw in early November there were more 6300PEs compared to 6200PEs and market fell badly - this time the story is opposite. There are more calls only at one strike which is 6000. And in last few sessions 6100/6200/6300CEs are quietly unwinding and keeping the lipstick @6000. No prizes for guessing what could happen!
iii) Food for thought: Despite the big rally from 5400+ to 6300, not even a single expiry has happened above high 6000s. Last 3 expiries were @6029, 5987, 5799. So call writers @6000/6100/6200/6300 have enjoyed free money for last 3 months. Do unusually good times last forever?
5. PCR took a U-turn and jumped from 1.05 to 1.13


Nifty Futures:
2.5Cr OI down almost 7% - 18.5L shares cut!! And this massive short covering has resulted in Nifty Fut OI going back to exactly the level seen at end of Black Friday (Nov 26th)


Banknifty Futures:
12.4L OI down 1% - All of the shorts initiated from 12500 levels since last Monday (6th Dec) are covered in last 2 days!


Weekly Charts:
On weekly timeframe, NF if holds the VAL @5819 (well you need to give another 20-25 pts for inaccuracy in Amibroker/data feed values and volatility) and crosses last week's breakdown region of 5940-5970 then a trip to 6005-6037 is definitely possible