ANXIETY

The markets opened on a flat note, and the tone was positive until Nifty made a peak of 5306,. The positive momentum continued till late in the afternoon, but by the time, the European markets opened, both the Nifty and the Sensex had pared all the gains. After a wide intraday movement, both the Nifty and Sensex ended  down by 64 and 238 points respectively. There was across the sector selling, but the major cut came from the banking and the midcap shares. The market breadth turned negative, with 529 advances to 954 declines. The only performers of the day were Dr. Reddy's, Kotak Bank and Sun Pharma. On the institutional side, again there was again, lack of participation from the FIIs, who were net buyers to the tune of mere 137 crores, while the DIIs were net sellers to the tune of 480 crores in the cash market. On the derivatives side FIIs brought Index futures worth 214 crores and sold Stock futures worth 105 crores. Nifty future closed at 5221,with a premium of 14 points to the spot, and moderate addition of open interest for the second consecutive day. On the options side the PCR increased to 1.09, along with a jump in the India VIX by 4.53%. On the Call option side, with a exception of 5500 & 5000 calls, there was  considerable addition of open interest from 5100 to 5600 calls, while on the Put options side, with a exception of  5000 & 5400 puts, there was considerable shedding of open interest from 5100 to 5600 puts. The activity in the F&O space shows considerable call writing along with increase in the implied volatility, which is adding downward pressure to the market, weakened by lack of participation. On the technical side, both the daily and weekly charts are showing a clear downtrend, which will reverse, only if Nifty starts closing above 5322 level, on a daily basis for a few sessions. In the current scenario, once again, i would like to reiterate that, every bounce-back should be used a selling opportunity. Going forward the levels to watch out for Nifty will be 5256, 5273 & 5323 on the upside, and 5151, 5090 & 5038 on the downside. The forthcoming week will be action packed with corporate results and RBI's monetary policy review.