Anand Rathi - Daily Strategist

The NIFTY futures saw a drop in OI 2.85% with prices positive indicating that as market opened high and not ready to go below 3600 levels weak shorts covered their positions and forced price to remain above 3650 levels. We feel that till the market doesn't go below 3600 levels we may not see aggressive short positions in the nifty futures and longs liquidating their positions. The FIIs bought index futures to the tune of 892 crs versus last day's sale of 1432 crs indicating short covering by them whereas heavy buyers in index options indicating hedged positions built up by them. The PCR has come up form 0.82 to 0.87 levels indicating some buying support emerging in the market. The volatility has come down from 29.90 to 28.65 levels indicating some buying support may emerge at lower levels in the market.

Among the Big guns, ONGC saw rise in OI to the tune of 4.07% with prices positive to the tune of 2.14% indicating built up of long positions aggressively indicating strength in the counter whereas RELIANCE saw drop of OI to the tune of 0.35 % with prices positive indicating that shorts covered their positions and fresh positions built up in the counter indicating strength in the counter.

In the TECH front, INFOSYSTCH saw fall of OI with rise in prices indicating lot of short covering is seen in this counter with no fresh buying emerging indicating rally may exhaust once short covering ends .TCS ,SATYAMCOMP& WIPRO saw fresh built up of long positions indicating strength may remain in these counters.

In the BANKING counters, SBIN, ICICIBANK saw rise in OI with prices almost flat indicating that both bulls and bears were aggressive in these counters indicating that bears were aggressive in these counter though market recovered indicating weakness in these counters.

In the metal pack TATASTEEL, Saw fall in OI with price positive indicating shorts covering in their positions in the counter SAIL saw fresh built up in OI with rise in price indicating fresh buying emerging in the counter indicating further strength in the counter. HINDALCO&NALCO saw fresh built up in long positions indicating strength in the counter whereas STER saw built up of huge OI with prices flat to negative indicating sharp movement is expected in this counter.

Considering the overall scenario and the markets behavior the market may show some volatility before taking any sharp and directional movement .If it remains below 3600 levels we may see fresh short positions being built up in the market. Traders are advised not to go aggressively short on the market unless important support level of 3600 is breached and any position taken today should be with strict stop losses to be adhered too.

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