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| Traders set short-term target at 3,000 | | F&O OUTLOOK |
| B G Shirsat / Mumbai Dec 05, 2008, 00:46 IST |
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The Nifty opened on a positive note and closed the day at 2,788 on short-covering and a fresh build-up of long positions. Technically, On Thursday’s close above the 10-DMA (daily moving average) level of 2,675 and 20-DMA level of 2,780 has turned the short-term bias in favour of bull operators. According to technical analysts, the index can now target the 3,100-level, if a break-out above 2,750 is sustained tomorrow.
The market turnaround in the 90 minutes before the close of trade is attributed to short-covering in index heavyweights like Reliance Industries (RIL), ICICI Bank, State Bank of India (SBI), Tata Steel and Tata Motors. Realty, metal and capital goods stocks also propelled the indices to a two-week high. The Sensex gained 482 points to close at 9,230, while the Nifty ended 132 points higher at 2,788.
Nifty December futures closed with a premium of 8 points to the spot market On Thursday compared with a discount of 2 points yesterday. After bear operators covered their short positions of around 1 million shares in the last two trading sessions, Nifty futures added an open interest (OI) of 2.06 million shares On Thursday, indicating that the bulls are building up long positions.
Among key stock futures, a build-up of long positions of around 2 million shares was seen in Steel Authority of India, Suzlon Energy, Hindalco and Unitech. There was short-covering of around 1 to 4 lakh shares in key index heavyweights such as SBI, Bhel, Infosys Technologies, Bharti Airtel, Larsen & Toubro and RIL. These stock futures have gained between 5 and 15 per cent and, hence, we may see some buying in them tomorrow.
F&O traders have started building up positions in 2,700 and 2,800 call options, indicating that they expect the index to move above the 2,800-level with a short-term target of 3,000. Traders were seen writing 2,700 and 2,800 strike puts, suggesting that the index has short-term support at 2,700-2,800 levels.
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