No fresh short positions created today

The benchmark indices fell 1.6 per cent on profit taking by FIIs and high networth individuals in key index heavyweights such as DLF, State bank of India, Hindustan Unilever and Reliance Industries. The FII Index of 15 stocks compiled by Instanex Capital suggests net buying in ICICI Bank, HDFC Bank and Sun Pharma.

The Nifty May futures closed at a discount of 2 points to spot on profit booking. The intraday volume on this counter suggests that traders booked profit at the 3,650-level and made some buying when it fell below 3,550. However, despite the increase in open interest (OI) by 2.09 million shares intraday, only 93,050 shares were uncovered during the closing session. This means no fresh short positions were created today.

Market analysts expect profit booking to continue for some time as investors are worried about the outcome of the poll as none of the main parties are likely to get a clear majority. According to technical analyst Kamalesh Langote of vfmdirect.com, though the Nifty closed below 3,600 at 3,554, it has strong support at 3,500.

The trend reversal is only possible if this support level is breached.