Anand Rathi - Daily Strategist

The NIFTY futures saw a gain of 6.23 % in OI with prices coming down sharply and closing low indicating short positions built up in the market thus suggesting if the follow up continues then we may see fresh built up in positions with shorts more aggressive and forcing weak bulls to liquidate their positions. The nifty June series futures closed at 31 points discount to spot nifty suggesting lack of confidence among players resulting in liquidation of positions by weak hands. Market if it sustains below 4240 levels then we may see further short positions built up in the market and longs liquidation. The FII were sellers in index futures to the tune of 164 crs and buyers in index options to the tune of 274 crs. The PCR has come up from 1.62 to 1.60 indicates some strength may be seen in the market.

IV in the market was 26.35 and HV was 22.78.

Among the Big guns, ONGC saw 7.19 % rise in OI with prices coming down indicating built up of short positions in the counter suggesting the counter may show weakness. Whereas RELIANCE saw gain in OI with prices closing down indicating selling pressure emerging in the counter at higher levels thus suggesting the counter may show further weakness in the coming days if market doesn't take support at current levels.

In the TECH counters all the major counters INFOSYSTCH, WIPRO, TCS & SATYAMCOMP saw gain in OI with prices down significantly indicating fresh short positions built up in overall IT pack suggesting further weakness may be seen in these counters.

In the BANKING counters, SBIN saw rise in OI with prices up indicating fresh money coming in the counter with buying spree suggesting further strength in the counter. ICICIBANK & HDFCABKN saw rise in OI with prices remaining in a range suggesting some profit booking may be seen in the counter.

In the Metal pack, TATASTEEL & SAIL saw rise in OI with prices facing resistance at higher levels indicating fresh short positions built up in the counter thus suggesting some weakness may be seen in the counter HINDALCO saw significant gain in OI with prices going up indicating built up of fresh long positions in the counter suggesting further strength in the counter. STER saw gain in OI with prices closing at day's low suggesting fresh short positions built up in the counter suggesting weakness in the counter. NALCO saw gain in OI with prices closing near day's low indicating short positions built up in the counter suggesting weakness in the counter.

We feel that the volume and built up in OI suggests that market may show some weakness if it remains below 4240 levels suggesting one should avoid taking aggressive positions in the market and should hedge the positions appropriately to avoid any unexpected movement in the market. One should trade with strict stop losses to be adhered too.

Stocks to watch: NEYVELILIG, SBIN, HCC, GESCOCORP (Looking positive)