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| F&O OUTLOOK: Support for Nifty expected around 5,200-5,300 |
| B G Shirsat / Mumbai Mar 19, 2010, 08:26 IST |
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The Nifty moved in a narrow range on Thursday, tested support at lower levels, and closed in the green on lack of selling pressure around support levels. Nifty March futures, however, closed above the upper band of the value area (execution of 70 per cent volume or time-price opportunity), indicating positive opening tomorrow.
The March futures saw change of hands from bulk buyers, probably on account of profit-booking. However, the futures closed at a premium to the spot, without adding significant open interest over previous day’s levels, indicating short-covering but no fresh long positions.
The April futures saw rollovers of over 1.10 million shares at a premium to the spot as well as the March futures, indicating long build-up. The Nifty is expected to move up further as 5,400- and 5,500-strike calls are adding significant open interest through buy-side trades. The support for the Nifty in the April series is expected around 5,200-5,300 as these put options currently hold 2.4 million shares in open interest. The 5,200-put of April series added 0.45 million shares in open interest while open interest in the 5,300 put rose by 0.95 million shares.
The 5,200- and 5,300-puts of the March series continued to add significant open interest despite only four trading days left for the expiry of the current series. The 5,200-put added 1.29 million shares, taking the total open interest to 7.15 million shares. The 5,300-put added 0.55 million shares, mostly through change of hands, indicating hedging of long trades. The participants covered short positions at 5,200- and 5,300-strike calls, which indicates the Nifty is heading towards 5,300, although the level may act as an immediate resistance.
Among stocks futures, Infosys Technologies is expected to move up further to around Rs 2,800, as its March futures closed above the upper band of the value area (Rs 2,745-2,770), indicating strong support at higher levels. ICICI Bank showed strength as its March futures closed above the value area with significantly high volumes. TCS saw distribution at higher levels, mostly through profit-booking.
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