FnO Datasheet 08-09-2011

It has been 2 weeks into this series and time to sum the series up and over view the complete position.

1. We are 9 trading days old in this series. It has been a remarkable series - We made a low of 4718 on the first day of the series. And from then on, apart from a minor 20 point loss 3 days back, we have closed all the days in green. A remarkable rally born out of complete bearishness on the first day of the series. And which changed the complete complexion of the game. From a dismal -45 on 26th August to +95 today on the Desi MO.
2. We are approximately 450 points away from the lows. Can we rally more? Ofcourse we can. But let us look at the rally in a different perspective. Let us assume the institutions are playing this game. Both the rallies and drops are profitable when you are dealing with FnO and you are on the correct side. And it costs to be on the correct side for the institutions. The cost is equity buying and selling. To induce a rally or a fall, buying or selling of equities is required. In August 2011, the earlier month, Nifty Futures made a fall of 600 points approximately from 5480 to 4840. For a fall of 600 points, FII have sold equities worth 12600 crore. On a same scale, if you consider this month, they got a rally of 440 points for a buy of 1300 crore. Well, there can be many inferences that can be taken out - but for me, the stand out inference is - they got the rally quite cheaply.
3. Let us get a bit more micro. Consider the last 3 trading days. They have net sold 32K contracts worth 800 crore. They could get a rally of 140 points. Well, there are two ways to look at this. The FII are feeling quite left out of this rally or... they are just adding to their shorts at each of the higher levels. In any case it is evident that the rally is not induced by FII. So, now you can take your pick. You can start thinking that  FII will chase this rally and we are going much higher or ... Be careful with your longs.
4. Zoom one more level. The last 2 trading days have seen the lowest 2 volume days of this series - both in equities and FnO. And we got a rally of 100 points in these 2 days. Yes - we are ahead of the game and now Institutions will chase the retail :)
5. Well, where do we go from here? I can only see one way. Do we have a bit more upside? May be - I do not know.  Ladies and Gentlemen, please fasten your seat belts. The roller coaster is about to resume its.... We are in for a rough ride for the next week or so.
6. You can find the entire data sheet here.

The August data that I have quoted is also available in the above workbook as a different sheet.