Support placed at 5200-5225 levels ::Emkay PDF link

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Support placed at 5200-5225 levels

View: Despite the fact that most indicators continue to suggest cautious sentiment prevailing, we believe strong support for the index is placed at around the 5200 levels.  We suggest taking profits in short positions on any decline to 5200-5225 levels.

Open interest in Nifty March futures declined to 25.58 million shares from 26.04 million shares. FIIs data indicates closure of long positions being observed. FIIs remained net sellers to the tune of Rs3.52 billion along with a decrease of around 2.66% shares in open interest. Interestingly, the premium of Nifty March futures over Nifty spot has started declining. Currently, the premium stands at 51 points (95.51 basis points) as against 54 points (100.83 basis points) observed in the penultimate session. Historically, such a large premium has resulted in sharp corrections.

Nifty put call ratio of open interest declined sharply to 1.22 levels from 1.31 levels. The level stands lowest since February, 2012. It has been observed that the Nifty has a direct correlation with the ratio. Like in the previous calendar year, the ratio is unable to sustain above higher levels of 1.35-1.45.  Any reversals from those levels have been followed by selling in the Nifty.

NSE VIX continues to move northwards. Currently, the volatility index stands at 27.67%, highest level in the current calendar year. The current level stands 0.94 standard deviation higher than 60-day average of 25.36%. Historically, the NSE VIX tends to make a high at around the 2 standard deviation. With 60-day standard deviation at 2.45%, an up move till 30%-30.50% cannot be ruled out. The increase in NSE VIX is largely attributed to the fact that outcome of key events are expected in March series.

Among Nifty March put options, maximum open interest is accumulated at 5200 strike with an open interest of 7.43 million shares (Rs39.25 billion). The prevalence of significant open interest at a particular strike suggests strong support prevailing at lower levels.

Click here to read report: Emkay Alternate Intelligence

Content:

Nifty Futures Open Interest Change	Top 10 Long Dated Options by Volumes	Ratio – Stock Volatility Vs Nifty Volatility
Sectoral Futures Open Interest Change	Select Global Volatility	Shareholdings Pledged/Revoked
Stock-wise Futures Open Interest Change	Nifty Volatility (Comparison of IV, HV, VIX)	Insider Trades
Nifty Options Accumulation Pattern	Nifty Intraday Volatility	Nifty Put-Call Ratio of Open Interest
Nifty Options Open Interest Change	Nifty Volatility Over Period	Dividend Watch
Top 15 Nifty Options by Volumes	Institutional Flows in Equity Segment	Rollover
Top 50 Stock Options by Volumes	FIIs Flows in Derivatives Segment

Thanks & Regards,

Emkay Equity Advisory