Fresh upside likely for Nifty

F&O OUTLOOK

As expected, the Nifty January futures closed above 3,100 on Friday, while the December futures closed at 3,082 after hitting an intraday high of 3,117. The market is expected to remain firm next week as F&O traders were seen covering their short positions. The uptrend is expected to continue for the next three days as the current-month contracts will expire on December 24. Technical analysts expect the index to be on course at the 3,160-mark next week.

The Nifty December futures saw unwinding of short positions and profit-booking as they shed an open interest (OI) of 3.25 million shares, while their premium to the spot market declined from 16 to 8 points. The January futures added an OI of 3.51 million shares and closed at a 19-point premium over December Nifty futures, indicating a rollover of long positions.

 

The 3,000 and 3,100 call options were seen changing hands as traders, who had sold these calls initially, were seen unwinding the shorts on expectation of a further consolidation in the Nifty. Interestingly, despite only three trading days left for the expiry of the December series, a build-up of long positions was seen in 3,200 and 3,300 calls, mostly from operators who have taken up short positions in the Nifty. Traders were also seen writing the 3,100 strike put, indicating a fresh upside in the index.

Futures of DLF and Unitech firmed up on Friday following short-covering and a fresh build-up of long positions from bull operators. DLF was up 10.5 per cent on account of unwinding of short positions (its OI declined by 1.21 million shares) in the December series and a long build-up in the January series (the OI was up 1.51 million shares). Unitech futures were up 16.5 per cent on rollover of 5.85 million shares in the January series.

Three Tata group stock futures — Tata Motors, Tata Power and Tata Steel — witnessed a significant buying at lower level and long rollovers in the January series. Reliance Industries witnessed profit-booking as its December series shed an OI of 790,125 shares, while the January series witnessed a rollover of 504,900 shares.