Nifty likely to be range-bound

F&O OUTLOOK

However, the futures and options (F&O) data has not shown any significant development and hence the Nifty may be range-bound and target the 5100 level in tomorrow's trading.

The derivatives trading volumes on the NSE, though, increased by Rs 6000 crore on Monday, due to short-covering in Nifty May futures and out-of-the-money call options.

Cairn India and Axis Bank rose due to the creation of long positions, whereas Ranbaxy and Satyam Computer witnessed short-covering. The banking stocks remained listless, with ICICI Bank lacking positional trades and SBI witnessing a built-up of shorts.

The options players covered their call and put options at the 5000 strike price. There was no further addition in open interest despite 41,442 call options contracts and 33,572 put options contracts being traded at that strike price.

The 5000 level is becoming vulnerable. Call writing took place at the strike price of 5200, indicating resistance at this level, while put writing at 4900 signalled the emergence of support.

Technical analyst Ashish Shroff of Ambit Capital does not expect Monday's pullback to sustain. The Nifty may face stiff resistance at the 5040-5060 levels.

The Nifty May futures on Monday met with profit booking at 5037 and closed at 5027. The OI in May futures increased by a mere 39,160 contracts despite trading of 5.35 lakh contracts, indicating intra-day covering of all positions.