Another gap down day. They are moving the index down only via gap downs. In the entire day, the index is not giving much of movement. The sub-20 VIX does suggest that the fear factor is not much evident in the investors. However, the OI data and FII figures are representing a completely different picture.
Today FII sold 49K contracts and OI increased by around same quantity. Price fall indicates that these are shorts built into the system. Nifty August Futures OI has increased by a massive 20L contracts ( well - 400 times is the leverage). The PCR has increased marginally - I believe it is due to the put writing at 5100 levels. That is not any comforting factor.
Considering the series as a whole, the FII open interest increased by 90K contracts and total OI has increased by 40L contracts. As of today's close nifty fell by only 75 points. Is the game just beginning now?
One bullish option to consider is these are covered shorts. Though FII bought high amount of options in the last 3 days - The volume is generally on the higher side negating the possibility of sideways movement. Further, one of the standard techniques followed by institutions is ... they will create shorts in FnO segment and then they will start selling in the equity market. That leads to bigger gains for them generally. Today, the equity sell volume by FII demonstrates that.
From the recent top (5700) we have corrected 2-2.5%. Where as rest of the world markets have corrected around 8-10%. SPX is an example that directly comes to mind - 1340-1250 as of now. DAX 7300-6700. So, we have not corrected all that much. We can say it is resilience ... or... game is ahead. Ladies and Gentlemen, fasten your seat belts, we are in for a rough ride soon.
You can find the complete data here.
Wednesday, August 3, 2011
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4 comments:
As of nifty close on Aug 3,
SPX was down (1340-1250)/1340 = 6.7% (much less than 8-10%)
Nifty was down (5700-5400)/5700 = 5.3% (much more than 2-2.5%)
Indeed we see what we want to see, even when the data is plain numbers.. Amazing indeed.
mylifemytrade:
Apologies. While doing calculation for our correction, I typed 200/5700 as a typo :(
Well, When I was typing the notes, SPX was at 1230 - which is 8% correction.
Anyway, I took the lesson in the spirit in which you intended to convey it. (hopefully. :) )
Yes - we see what we want to see - it will not be the same for all people - because each one has a different vantage point - and that is all he can see. The mistake is not by intention but by design. Let me not get any more philosophical on this - and say, I am attempting to be as objective as I can.
For people like you who can deal with "plain numbers" - the data sheet is always there - leave the remarks column and use the data compilation.
Thanks for a valuable lesson.
Regards,
can u share the link from where we can find historical data of FII positions as NSE is giving for one day only.
Thanks.
Yes we all see what we want to see, but it's only a fine mind which can pen down all he can see.
I've seen too many sharp minds get bogged down by their biases and not project all their thoughts when they pen down all.
I can safely say that Kris is neither a perma bull nor a perma bear, each of who get their views right 50% of the time and make a song and dance about that part.
What Kris may have wanted to project was that relative to June bottoms (in major world markets) we are way up, when compared to other majors like the SPX which have just broken the June lows. Again a matter of perception, a glass half full or half empty.
We may be showing relative strength or we have a further fall to catch Up !!
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