Nifty Future Trading Strategy on Budget Day

By | February 27, 2013 7:47 pm

FII

Highlights of Economic Survey

1. FIIs sold 25  Contracts of Index Future (NSE Nifty Futures and Bank Nifty Futures combined),worth 1.4 cores with net Open Interest increasing by 38839 contracts.FII has done rollovers yesterday and will trade heavily in March segment tommrow.

2. General Budget of 2013-14 will be presented tommrow at 11 AM. Lot of Volatility will be seen, as seen in below chart. Will request readers/traders who cannot digest the huge swings to stay away from market. Just watch the show from sideline, do not let your hard earned money to go for a toss. Below is the Swings we have seen on Budget day from 2007.

Budget Day

3. NS closed at 5796.9 after  making high of 5818 and low of 5750. Nifty has been falling relentlessly the whole feb and today we saw few signs of bottoming out formation with positive divergence in Market breadth indicator.Also Nifty has formed double bottom pattern today at 5750, if its held tomorrow on closing basis short term reversal can be seen.For Option traders i have discussed an Option strategy Option Trading Strategy for Budget Day 2013 which can be used for trading tommrow event. But do not the IV’s have shooted up considerably which has increased the Option premium abnormally, For eg 5800 CE is trading at Rs 38 with only 1 day left for expiry. Readers do note IV’s will fall drastically as soon as Budget is delivered by FM, so Option Buyers try to get out of trade before FM completes the Speech.

 

4. Resistance for Nifty has come up to 5858 and 5895  which needs to be watched closely ,Support now exists at 5727 and 5700.Trend is Sell on Rise till 5858  is not broken on closing basis.

5. Nifty Future Feb Open Interest Volume is at 1.44 cores with liquidation of  6.3 lakh in Open Interest , Cost of Carry of Nifty Future went to -18.59   showing shorts were rollovered to March series . Rollovers have started in Index Futures and today 6 lakhs got rollovered and fresh addition of 11 lakhs mostly short addition.

6. Total Future & Option trading volume at 1.99 lakh Cores with total contract traded 2.3 lakh , PCR (Put to Call Ratio) at 0.78 and VIX at 16.39.Cash Market Volume has expanded today as compared to previous eight sessions.

7. 6000 Nifty CE  is having highest OI at 0.95 Core with addition of 4.1 Lakhs ,  5900 Call Option added 4.19 lakhs in Open Interest of  83.6  lakhs premium at Rs 9 Bears covering shorts added at Rs 31 2 days before, 5800 CE added only 2.3 lakhs in OI, Bears are now targeting ceiling at 5800 adding 24 lakhs in OI in 2 days.5700-6100 Call Options added 6.8  lakhs in OI. 

8. 5800 Put Option is having highest  Open Interest of  59 lakhs with liquidation  of 4  lakhs in OI  , 5900 PE liquidated  5.4 lakhs in OI and almost 2.5 lakhs liquidation  in 5700 PE.5700-6100 Put Options liquidated 15.2  lakhs in OI.Looking at Option Table we can see an Up move near 5900-5950  odd levels tommrow.

9. FIIs bought in Equity in tune of 106 cores,and DII bought 24 cores in cash segment,INR closed at 53.84

10. Nifty Futures Trend Deciding level is 5827(For Intraday Traders), Trend Changer at 5931 NF(For Positional Traders). (Above this Level Bulls will rule Nifty/Below this levels Bears have upper hand). Bank Nifty Future Trend Changer Level 12374.

Buy above 5820 Tgt 5858,5895 and 5921

Sell below 5748 Tgt 5727,5700 and 5638(Nifty Spot Levels)

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