December 9, 2013

NIFTY closes at new lifetime high

NIFTY closes at new lifetime high. The closing was however towards the day's low as the high made in first 5 minutes was never crossed. In fact, the first 5 min bar showed a long upper tail which is indicative of selling.

Advance decline was negative even as nifty closed 1.7% in the positive.




Today was also the day when VIX dropped 18%. We had bought 6400 calls @ 80 on Thursday and while the market was 1.7% positive, we earned barely Rs.20/-. Those who would have bought calls at close on Friday had actually lost money!

Recall that on Friday option writers had written 6400-6500 calls but thanks to the massive drop in VIX, they have not lost anything.... it is the buyers who have lost.

For today, the open interest continues to be highest at 6400-6500 calls though there is a lot of unwinding of positions. Open interest in 6200 put has increased implying that this is likely to be the new support.

Intraday charts clearly show the selling and subsequent rangebound trading....


We booked profits in 90% of our delivery positions.... we will now sit back, take a relook in light of revised data now available and then take a fresh call on the market.

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