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| F&O Outllok: Nifty may witness fresh bounce-back |
| BG Shirsat / Mumbai Aug 19, 2009, 08:15 IST |
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The Nifty On Tuesday staged a bounce-back from its technical support level of 4,375 to close at 4,459 on short-covering and renewed buying in shares of auto, capital goods, realty and power companies.
Technically, we may see a fresh bounce-back as both the indices, Sensex and Nifty, have not fallen into a bearish pattern as they have not broken their recent lows. The Nifty has maintained its trend-reversal level of 4,360 and now has support at the 4,400. It may even breach the 4,500-level tomorrow.
Nifty August futures closed the day at a four-point discount to the spot and lost an open interest (OI) of 941,700 shares, indicating short-covering by bears. The Bloomberg data indicated profit-booking during the morning session and short-covering when the index started trading above 4,425. A fresh long build-up was seen in the September futures as it closed at a premium and added an OI of 590,450 shares.
Options traders were seen covering their short positions in almost all strike call options, indicating a fresh bounce-back from the current level. The 4,400, 4,600 and 4,700 strike calls lost an OI of over 200,000 shares each, and the Bloomberg data suggested that the decline was largely due to buy side deals. The 4,300 and 4,400 strike puts continued to add fresh OI, indicating a strong support zone for the Nifty.
The traders were seen covering their short positions in several stocks that had declined sharply on Monday. DLF, which gained 3.29 per cent On Tuesday, witnessed unwinding of short positions of 391,200 shares. Tata Steel saw unwinding of 1.53 million shares as the stock gained 3.14 per cent.
Hindalco, the top gainer among the Nifty stocks, witnessed a fresh long build-up as its August futures was up by 6.5 per cent with a 17 per cent rise in OI.
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