F&O Watch: Rally ahead, Nifty PCR drops to 1.1

Underlying

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Nifty46.8947.8146.3845.1943.22 Reliance 22.6423.7220.9019.1718.54 Tata Steel16.7517.1417.4016.4116.01 ACC7.207.797.106.335.22 Sterlite 1.631.661.551.351.30 Satyam 15.2714.3811.789.764.65 Cipla10.7211.189.198.356.71 Total1193.321221.131173.011132.471111.24  Thus a significant build up (16.8 lakh shares) in 3300 puts suggests it to be a support level in the coming days. The Nifty may face resistance at 3500 levels given the huge build up of 18.7 lakh shares in the 3500 call options.  OI has increased substantially in Infosys (28%), Satyam (43%), TCS (39%), ITC (36%), UTI Bank (27%) and Cipla (21%).  The CNX IT has added over 20,000 shares in OI on a week-on-week basis along with positive cost of carry, which gives a bullish view on the IT sector. Fresh long positions were seen in Infosys (11%) on Thursday, and the CoC is also significantly positive and can give an upside move.

 We may see a bounce in ITC & UTI Bank with OI build up and annualised COC being positive by 25-30%.