Anand Rathi - Daily Strategist

The NIFTY futures saw a marginal fall in OI 0.13% with prices closing at 3548.75 indicating that lot of longs liquidated their positions and fresh short positions were built up in the market as the market was not ready to sustain at higher levels. Global factors also induced weakness in the market. We may not see aggressive short covering and fresh money coming in the market till the market doesn't sustain above 3750 levels .The nifty futures closed at a substantial discount of 28 points to spot nifty suggesting that futures market is oversold as compared to cash market. Selling pressure was witnessed even when markets recovered. The FIIs were sold nifty futures to the tune of 87.54crs .The PCR has come down from 0.99 to 0.93 levels again indicating weakness in the market .The volatility has risen from 27.70 to 34.95 levels indicating volatile trading sessions ahead and increase in premiums of call and put.

Among the Big guns, ONGC saw fall of OI to the tune of 2.90% with prices coming down 3.24% indicating lot of long positions are liquidated in the counter performing in line with the market whereas RELIANCE saw rise of OI to the tune of 6.74 % with prices coming down 4.32 % indicating that the counter is seeing lot of fresh short positions built up indicating further weakness in the counter.

On the TECH front, TCS, INFOSYSTCH, SATYAMCOMP, WIPRO saw fall of OI with sharp fall in prices indicating that lot of long positions are liquidated in these counters.

The BANKING counter lead by ICICIBANK & HDFCBANK saw OI coming down marginally and prices going down indicating longs liquidating their positions and fresh short positions formed in these counters whereas SBIN saw heavy fall in OI to the tune of 10.56 % with fall in prices to the tune of 4.22 % indicating liquidation of long positions in the counter.

In the METALS TATASTEEL, HINDALCO, STER, NALCO saw liquidation of positions whereas SAIL, JSWESTEEL saw fresh short positions built up in these counters indicating further weakness in these counters.

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Thanks Yash

Considering the overall scenario and the markets fell down sharply mainly due to global cues any recovery in foreign markets may lead to sharp short covering in our market ., we feel one should hedge the positions. Traders are advised to place strict stop losses.