F&O: Breakout may lead to further gains

Technically, a higher top and bottom formation indicates the possibility of further upsides. A breakout is likely to take place in a day or two and this should take the Sensex and Nifty to their 200-DMA levels. The Sensex's 200-DMA is around 17,200 and the Nifty's is 5133.

The rollover in Nifty April futures contracts increased further by 3.72 million shares to 22.52 million shares. Long positions were apparently rolled over as the Nifty May futures traded at a premium of nine points over April futures.

The options activity indicates that Nifty may face a strong resistance at 5100 and support at 5000 levels. This is because the 5100 call options OI is up by 5.14 lakh shares, while the 5000 put options OI has risen by 4.82 lakh shares.

The call and put writers take contrary views on the prevailing market situations. Call writers expect a fall in the value of underlying stocks or indices, while the put writers anticipate a rise.