"It is not the strongest of the species, nor the most intelligent that survives, but one that is the most adaptable to change"  -  Charles Darwin.
The last week, Nifty ended near its weekly low due to profit booking in heavy weights. The new expiry started with rollover of 68% in nifty and discount to spot. On other hand Most of the heavy weight stocks have seen good rollover with positive cost of carry. Options concentration during the week has shifted to the 5200-strike put option with an open interest of above 61 lakh shares closely followed by the 5400-strike call option with above 52 lakh shares. This option concentration suggests, the near term range of 5200 to 5400. Implied volatility (IV) of index options is giving early signal of going up. Difference between the IVs of puts and calls has fallen sharply. This indicates no clear directional expectation in Nifty. The implied volatility (IV) of call options closed at 18.38% while the average IV of put options ended at 19.03%. July put-call ratio of open interest decreased and closed high at 1.49 levels. The options activity suggests, Nifty has good support around 5200 levels but any instability on the global front will bring about selling pressure from current levels.
How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth EditionPut Call Ratio Analysis: The Put-Call open interest ratio of Nifty has decreased to 1.49 from 2.03. At the end of week, the maximum stocks had negative trend of change in put call open interest ratio.
Implied Volatility Analysis: The Implied Volatility (IV) for Nifty futures this week has increased to 18.38% from 14.68%. The IV of the stock futures has changed this week ranging from -22.24% to 6.71%.
Open Interest Analysis: The open interest for the index at the end of this week has increased by 14.69% as compared to the previous week. All future stocks saw changes in their open interest ranging from -27.79 to 63.91. NTPC has the maximum increase in open interest as compared to other stocks.
Major News/Headlines:
BNP Paribas: Upgraded China to Overweight from Neutral and downgraded India to underweight from overweight.
Anagram: Market likely to consolidate.
Barclay: We may see a 75 bps hike in interest rate within October, 2010.
Fairwealth Management: Buy IDEA on every dips for a target 63.
RCOM & GTLINFRA pact: Good for both the company.

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