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| F&O Outlook: Nifty likely to see sell-off above 4,950 levels |
| BS Reporter / Mumbai Nov 10, 2009, 08:14 IST |
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Benchmark indices closed convincingly above Friday’s intra-day high to keep the bullish sentiment intact. Now, the Nifty is expected to face resistance around 4,940, which is 61.8 per cent retracement level of the recent fall from 5,181 to 4,538.
The resistance for the Sensex is seen at 16,670. Futures and options (F&O) data suggest profit-booking in Nifty above 4,950. The Nifty November futures closed at par with the spot and added 795,950 shares in open interest (OI), indicating a blend of short and long positions. Bloomberg data suggested change of hands in the morning session as buy and sell were evenly matched at 45 per cent. There was profit-booking above 4,860 as sell-side trades rose to 47 per cent while mid-value trades remained at 10 per cent.
Call options traders wrote 4,800-5,000 strike calls in the first two hours of trade when the Nifty slipped below 4,800. However, traders covered short positions in the afternoon when the Nifty moved convincingly above 4,860. In the end, the 4,800-5,000 calls together shed 1.68 million shares in open interest, indicating short-covering. Similarly, 4,800-4,900 puts saw short-covering in the morning and fresh short positions in the afternoon. In the end, 4,800-4,900 puts added 3.25 million shares in open interest, mostly from sell-side trades, indicting fresh put writing. The 4,700 put though added 1 million shares in open interest, mostly through buy-side trades, indicating hedging of short positions.
Banking stocks were in the limelight as traders not only covered their short positions in early trade and built long positions thereafter. ICICI Bank added 0.91 million shares in open interest while State Bank of India shed 94,116 shares in open interest, indicating fresh long build-up and short-covering, respectively.
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