For Nifty bears, the signs are ominous


JUST one word defines the sentiment amongst Nifty traders going into the settlement of the July series of derivative contracts — confusion. For, a series in which the Nifty initially fell over 12% only to follow it up with a 20% rise, it’s natural for a large number of players to be caught on the wrong foot, reports Shakti Shankar Patra from ET Intelligence Group. And this is clearly reflected in rollover figures, which at 53.75% is much lower than the past six month’s average of 61.72% on the S-1 day. But fortunately for Nifty bulls, the rollover is happening with a positive bias, as bulls seem to be more confident than bears going into August. The fact that July and August futures are trading in contango (August futures trading higher than July futures), only further validates this. This confusion, which leads to more volatility, is reflected in the options segment as the India VIX is trading at extremely high levels — it had closed at an all-time high on Tuesday and even after cooling off substantially on Wednesday, is quoting above 50.

However, such high VIX levels — which are higher than even that during the madness of January —clearly suggests the panic is overdone and justifies the long rollover seen in the Nifty. As for settlement day, Wednesday saw massive buying in the 4300 call and selling of the 4400 put, many of them even below its intrinsic value.

Generally, a put quoting below its intrinsic value is seen as a bullish sign as it suggests that stronger hands are writing these puts, knowing very well that their cash buying would push the underlying above the strike price, rendering them worthless. So, the signs are ominous if you are a Nifty bear.


My Commnets:
This above post is a ditto copy of what I read today in ET.......Read the last para that I have highlighted in bold blue words.....
I would like to have expert opinion of Mr Azad who seems to able to read the technicals of market very well as he was able to judge the upmove from 12500 and started buying from thereon....
I am keeping my fingure crossed whether the market breaks the resistance of 15300 or not as written by Mr Azad and then slowly drift towards below 10,000 and then to 2000 level or period.......
I also suggest readers to read the whole post nicely and try to understand what Mr.Shakti Shankar Patra wants to say.....
I would only write here that ,though the CRR rate was hiked and not so good nos of Inflations market went up......ignoring the bad factors.......I repeat , ignoring the bad factors.......
it means , market do not wants to go down more now on bad news and is ready to go up on any good sign.....