Activity builds up in tech stocks

F&O OUTLOOK

The markets gave a breakout on Thursday, with the Sensex and Nifty closing above their 50-days moving average (DMA). The indices may continue the uptrend in the next few sessions and target the 200 DMA. The 200 DMA is 17,100 for the Sensex and 5130 for Nifty.

The options activity suggests that Nifty and Sensex will trade in a new zone when the markets re-open on Monday after a gap of three days. In the event of positive global cues, the Nifty is likely to breach the 5000 level and Sensex should cross 16,650 after almost two months.

Many positives emerged from Thursday's trading. The open interest in 5000 put options rose sharply by 37 per cent and 27 per cent of the day's trades were carried forward.

The 5000 call OI was up by a mere 2.80 lakh shares despite trading volumes of 30 lakh shares, indicating that call writers squared off positions on an intra-day basis.

The Nifty May futures came within striking distance of the 5000 mark during the day, touching a high of 4990, before closing at 4965.

The May futures enjoyed a premium of five points over April futures and seven points over spot Nifty. The rollover in Nifty May futures stood at 33 per cent (it was 27 per cent on April 16) and the OI rose by 18 per cent, which shows the rollover of longs.

Technology stocks continued to hog the limelight, with the stock futures of Infosys, Satyam Computer, TCS and Wipro firming up further by around three to four per cent accompanied by a fresh built-up in long positions.