Interpreting top 10 open interest – 8-July-2011

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As options open interest shows us the footprint of smart money/big players, so lets try to decipher their footprint. Here is the list of option strikes (July expiry) that have got highest open interest as of Friday’s close.

Top10 OpenInterest Analysis 8-July

Lets take another look at latest OI for 5 strikes around market close.

S&R levels as per OI - 8-July-2011

Observations –
1) 5700 and 5800 Calls have added more than 14 lacs of OI. They are also having the highest level of OI as of now. This indicates a strong resistance level at 5700/ 5800 level for July series.
2) During this week, net Put Call Ratio (PCR) has increased. It is either due to increase in Puts or Decrease in Calls. It is indicating increased bearish buildup.

3) There is no major change in 5600 and 5800 Calls but there has been 8 Lac plus change in OI for 5700 Call. This indicates a resistance is currently set at 5700 level.

4) Higher volume of Open Interest in Calls at 5600, 5700, 5800 will make it difficult for market to go up.

Interpretation –
1) For now the range for current series is established between 5300/5400 on downside and 5700/5800 on upside. No change in this week.

Hope this analysis helps you in forming your own views on market. Feel free to drop your comments on the post. Let me know if you would like to see something more in the analysis.

Disclaimer These are my views on the market and I could be wrong in reading it. Please use your own judgment and make sensible trading decision based on your own analysis.

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