Support seen at 5200

F&O OUTLOOK

The ten days uninterrupted rally snapped on Thursday on weak opening of Asia Pacific markets and profit booking at higher

levels. There was sharp volatility in early trade. However, the market become stable as a pullback recovery set in at lower levels.

The BSE Sensex recovered from the day's low of 17,495 to close 70 points lower at 17,777. The S&P Nifty closed two points down at 5209, after hitting day's low of 5126.

The Nifty October futures traded at discount to spot Nifty almost throughout the day, but closed at a premium of two points due to short covering. The open interest in Nifty October futures increased by 24.75 lakh shares on account of fresh long positions. The order book data shows more buyers than sellers in Nifty October futures at the end of the session.

The derivatives turnover declined on Thursday by Rs 31,000 crore to Rs 69,000 crore from yesterday's Rs 100,056 crore. This indicates a cautious approach by the day traders on fears of a correction.

The Nifty Put/Call ratio moved up marginally from 1.34 to 1.36 as Nifty Put options added OI of 12.97 lakh shares and Nifty Call options added 7.72 lakh shares.

The increase in Put options open interest, especially in out-of-the-money Puts, indicates that fresh long positions were built at the day's lows.

The Nifty 5,200-5,400 Call options saw a build-up, indicating resistance at these levels before any further upside. The Nifty 5000-5100 Put options OI rose, signalling a support at those points.

However, there is Put writing at the strike price of 5,200, showing that bulls have moved up their support levels.