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| Support at 4,250 is crucial for upward bias |
| BG Shirsat / Mumbai Jul 01, 2009, 00:49 IST |
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The Nifty barely managed to stay above its support level of 4,290 but lost steam at 4,350 levels. The latter was crucial for keeping the positive bias intact. The Nifty July futures closed at a discount of two points to the spot and added open interest of 672,550 shares, indicating creation of fresh short positions.
Technical analysts expect the market to remain firm as long as the Nifty retains its support of 4,100. The 4,200 put has the highest open interest among all puts, which indicates that the Nifty has strong support at this level.
As expected, the Nifty opened on a positive note but reversed early gains in the first 15 minutes, when it was trading above 4,400 levels.
Profit-booking was seen in the afternoon trade, when the index slipped below 4,350. The profit-booking aggravated when the Nifty fell below 4,300 levels with almost 29 per cent trades changing hands during the closing hour at an average index level of 4,280.
The profit-taking was spread across all stocks futures as open interest in 113 futures declined by over 41.6 million shares. Ispat Industries, RNRL, GVK Power & Infra, JP Hydro, Essar Oil, IFCI, IDFC, Suzlon Energy, JP Associates and Hindalco fell 5-10 per cent each from the day’s high as speculators cut their long positions by over 1 million shares in each of these stocks futures.
The weakness is seen from fresh short build-up in several stocks futures. This has appreciated sharply in the last one month. Bajaj Hindustan fell sharply by 12.4 per cent from its intra-day high and added open interest of 3.08 million shares, indicating a short build-up.
Unitech fell 8.8 per cent and added open interest of 3.5 million shares, Balrampur Chini fell 7.7 per cent and Tata Motors fell 9.1 per cent and added open interest of 900,000 shares each, indicating a short build-up.
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