Broader market seems to be on a correction mode or at least would remain choppy ahead of the December series expiry

Rollover to the January series have already started, but it is still not clear whether it is on the long side or on the short side… but the nifty option segment indicates huge drag for the nifty in the week ahead S&P nifty & nifty future and Futures & Option segment volumes Markets took a breather during the previous week ended 21st December 2012 as the parliament concluded the winter session. So the domestic news flow stopped for the moment, while the global scenario worsened, and that contributed to the gloom on Friday when the nifty fell by 68.7 points to close at 5847.70. Overall for the week the nifty pared 31.90 point, but the nifty December future premium narrowed sharply to just 5.7 points, thus indicating the bearish undertone. Hopes of fiscal cliff issue in the US being addressed before Christmas faded and that caused the global markets to correct sharply on Friday. For the Indian markets the foreign fund flow is expected to slow down while rising crude oil prices and depreciating rupee may play spoilsport in the immediate term. Nevertheless hopes of interest rate cut by RBI in January could limit the downside. The broader market now seems to be on a correction mode or at least would remain choppy ahead of the December series expiry. Rollover to the January series have already started, but it is still not clear whether it is on the long side or on the short side. But the nifty option segment indicates strong resistance at every high. During the week under review the nifty future of the December series shed 40.56 lakh shares in open interest (OI) to take its total OI to 1.56 crore shares as the positions were rolled over to the January 2013 series. The January series added 43.15 lakh shares in OI to take its total OI to 75.05 lakh shares. The Bank nifty future of the December series shed 88k shares in OI while its January 2013 series added 43 lakh shares in OI to take its total OI to 2.77 lakh shares. In the nifty option segment 5800, 5900 and 6000 strike call option of the December series witnessed aggressive writing. On the other hand 5700 and above strike put option of the January 2013 series added OI due to buying, indicating perhaps huge drag for the nifty in the week ahead. The average volume during the week under review was high at Rs 151597.37 crore as compared to Rs 131143.32 crore during the previous week. The put-call ratio of index options on Friday was lower at 0.91 as compared to 0.99 the previous day. The stock put-call ratio was higher at 0.52. The market wide put-call ratio on Friday was lower at 0.88 as compared to 0.94 the previous trading day. The 5800, 5900 and 6000 strike call option of the December series added 10.35lakh shares, 15.22 lakh shares and 4.9 lakh shares in OI due to writing, to take their respective total OI to 30.68 lakh shares, 81.59 lakh shares and 1.25 crore shares respectively. On the other hand 5700, 5800 and 5900 strike put option of the January series added 10.99 lakh shares, 3.45 lakh shares and 2.07 lakh shares in OI due to buying to take their total OI to 25.20 lakh shares, 26 lakh shares and 14.81 lakh shares respectively. 5800 and above strike put option of the December series shed OI as put wrote earlier were covered. Markets took a breather during the previous week ended 21st December 2012 as the parliament concluded the winter session. So the domestic news flow stopped for the moment, while the global scenario worsened, and that contributed to the gloom on Friday when the nifty fell by 68.7 points to close at 5847.70. Overall for the week the nifty pared 31.90 point, but the nifty December future premium narrowed sharply to just 5.7 points, thus indicating the bearish undertone. Hopes of fiscal cliff issue in the US being addressed before Christmas faded and that caused the global markets to correct sharply on Friday. For the Indian markets the foreign fund flow is expected to slow down while rising crude oil prices and depreciating rupee may play spoilsport in the immediate term. Nevertheless hopes of interest rate cut by RBI in January could limit the downside. The broader market now seems to be on a correction mode or at least would remain choppy ahead of the December series expiry. Rollover to the January series have already started, but it is still not clear whether it is on the long side or on the short side. But the nifty option segment indicates strong resistance at every high. During the week under review the nifty future of the December series shed 40.56 lakh shares in open interest (OI) to take its total OI to 1.56 crore shares as the positions were rolled over to the January 2013 series. The January series added 43.15 lakh shares in OI to take its total OI to 75.05 lakh shares. The Bank nifty future of the December series shed 88k shares in OI while its January 2013 series added 43 lakh shares in OI to take its total OI to 2.77 lakh shares. In the nifty option segment 5800, 5900 and 6000 strike call option of the December series witnessed aggressive writing. On the other hand 5700 and above strike put option of the January 2013 series added OI due to buying, indicating perhaps huge drag for the nifty in the week ahead. The average volume during the week under review was high at Rs 151597.37 crore as compared to Rs 131143.32 crore during the previous week.