Anand Rathi - Daily Strategist Note

The NIFTY futures saw a decrease in OI 5.18% with prices closing at 3761.00 indicating that lot of short covering happening as market moved up one way with volatility as finally foreign markets recovered which forced bears to run for cover on their positions and liquidating their positions as market recovered .We feel that till the market sustains above 3750 levels we may see aggressive short covering and fresh money coming in the market which is the need of the hour.

The nifty futures discount narrowed again and aggressive buying brought it to a premium .The FIIs were buyers in futures to the tune of 1196 crs .The PCR has come up from 0.91 to 1.00evels indicating some good days in the market .The volatility has come down from 31.50 levels to 29.70 indicating some respite in the market.

Among the Big guns, ONGC saw loss of OI to the tune of 2.79% with prices coming up 1.91% indicating long positions are created in the counter as the counter moved up showing strength whereas RELIANCE saw major loss of OI to the tune of 5.47 % with prices shooting up by 3.63 % indicating that the counter saw lot of short covering in line with the market.

On the TECH front, TCS, INFOSYSTCH, SATYAMCOMP, WIPRO saw fall of OI with sharp rise in prices indicating lot of short positions being cut and longs being formed in these counters performing in line with market.

BANKING counters saw loss in OI with prices going up indicating that shorts positions cut and fresh long positions formed in the counter which may give some support to the rising markets whether be P.S.U'S or P.V.T banks.

In the METALS like other sectors across the board buying took place and without exceptions as all stocks were covered as global prices on the L.M.E also helped to pulp the bears as if we had no tomorrow, however we saw lot of short coverings in all of them at the fag end of the market.

Considering the overall recovery in the market after the initial rise and later the massacre of the short positions which was respite by a pull back at the end, we feel the temporary worst is over if the markets close today above yesterday's close in the positive, we could feel comforted, however traders are still warned and buying with strict stop losses is the need of the hour.

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