Thursday, February 3, 2011

Curious trading action today

This one is going to be a short one....

Its 1:30 pm and the Sensex is up 280 points, Nifty is up 71 and the screen is looking far more green than red. Worst over? Forget it, in fact far from it. Just take a look at the internals

The advance/decline ratio is not even 2:1, but the most telling stat is the volume picture. cash market volumes at 9,000 cr and F&O volumes at 80,000 crores. That's 9x in terms of F&O-Cash ratio, which is obscene

The sane ratio is 4-5x, on boring days it comes down to 3x and during expiry it surges to around 7-8x. But hello, early in a series, we are at 9x!!!

The fact is that Asia is closed. There are no volumes from Hong Kong and Singapore desk. So while the cats are away, mice are at play. Just take a look at the profile of stocks rallying and you will get the gist

Conclusion: Don't fall in this trap. This is a sucker's rally. Wait till Monday, wait for markets to stabilise before taking the plunge

Disclaimer: The author of this article does not invest/trade in stock markets including derivatives


  1. bingo !!!! didnt have to wait for monday, mkt already in tatters....thnx... keep up the good work

  2. Thanks Pallav. I would try my best. Please keep posting comments, any feedback including critical would be most welcome