Cautious June Series Ahead
The following article from BS has some startling revelations
After the tough time in May grim outlook for June is anticipated .May lived upto its image of a losing month.The Sensex dipped 5.04% in May,the month also continued its bizarre trend of falling in even years which began with the year 1998.It also fell in 2000,2002,2004 and 2006.This was the ninth instance of the markets falling in the last 19 years and average loss also seen in may,which was 0.85% till last year , increased to 1% after this fall.
Going by history though June is not scray at all , infact its rock solid . However the signals emanating from derivatives segment aren't all that rosy ...given below is analysis for the same
We are beginning the next series with a carry over Open Interest(OI) of Rs. 58,605 crore,the highest so far since the expiry of December derivatives when the residual OI was Rs. 94,315 crore with which we began the January series. In absolute terms the current OI is 37% lower than the one with which we began the Jan series,So apparently this does not seem to be an issue >but herein lies the catch !!!
If we now bring in the average daily volumes of the derivatives into picture the vision gets corrected.OI of Rs. 84,315 crore seen at the closing of Dec series is 1.37 times the average daily volumes of Dec.Compared to current OI of Rs 58,605 crore is 1.5 times the average volumes of May . The percentage fall in OI between Dec 2007 and may 2008 is lower than the volumes which have dipped more..though OI at month beginning is seldom much of an issue , it could become problem area if the market develop weak knees again.
Another danger is high PCR(Put Call Ratio) at the beginning of new settlement . PCR of 2.08 is highest for any June series in the history of derivatiaves trading in india.This high magnitude of PCR indicates that puts have been horded by wary investors.Of the total Puts in June series 38% of OI is in 4,800 series and 15% in 4,700 series.These indicate support levels but Puts have been bought for levels as low as 4,100 which account for a staggering 11% of OI !!!
Nifty is currently in a very tight 4,800-5,200 range. But the fact that the process of lower top and lower bottom formation has begun does not quite augur well for the month of June which otherwise has an immaculate track record .
After the tough time in May grim outlook for June is anticipated .May lived upto its image of a losing month.The Sensex dipped 5.04% in May,the month also continued its bizarre trend of falling in even years which began with the year 1998.It also fell in 2000,2002,2004 and 2006.This was the ninth instance of the markets falling in the last 19 years and average loss also seen in may,which was 0.85% till last year , increased to 1% after this fall.
Going by history though June is not scray at all , infact its rock solid . However the signals emanating from derivatives segment aren't all that rosy ...given below is analysis for the same
We are beginning the next series with a carry over Open Interest(OI) of Rs. 58,605 crore,the highest so far since the expiry of December derivatives when the residual OI was Rs. 94,315 crore with which we began the January series. In absolute terms the current OI is 37% lower than the one with which we began the Jan series,So apparently this does not seem to be an issue >but herein lies the catch !!!
If we now bring in the average daily volumes of the derivatives into picture the vision gets corrected.OI of Rs. 84,315 crore seen at the closing of Dec series is 1.37 times the average daily volumes of Dec.Compared to current OI of Rs 58,605 crore is 1.5 times the average volumes of May . The percentage fall in OI between Dec 2007 and may 2008 is lower than the volumes which have dipped more..though OI at month beginning is seldom much of an issue , it could become problem area if the market develop weak knees again.
Another danger is high PCR(Put Call Ratio) at the beginning of new settlement . PCR of 2.08 is highest for any June series in the history of derivatiaves trading in india.This high magnitude of PCR indicates that puts have been horded by wary investors.Of the total Puts in June series 38% of OI is in 4,800 series and 15% in 4,700 series.These indicate support levels but Puts have been bought for levels as low as 4,100 which account for a staggering 11% of OI !!!
Nifty is currently in a very tight 4,800-5,200 range. But the fact that the process of lower top and lower bottom formation has begun does not quite augur well for the month of June which otherwise has an immaculate track record .
posted by rocky at
5:35 AM
1 Comments:
nice and useful info man..ll take care of that..
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