Daily Strategist Note

The NIFTY futures saw a gain of 5.11 % in OI with prices coming down and closing low indicating aggressive short positions built up in the market thus suggesting if the follow up continues then we may see fresh built up in positions with bears more aggressive and forcing weak bulls to liquidate their positions. The nifty June series futures closed at 27 points discount to spot nifty suggesting aggressive short positions built up in the market. Market if it sustains below 4220 levels then we may see further short positions built up in the market and longs liquidating their positions. The FII were sellers in index futures to the tune of 1522 crs and sellers in index options to the tune of 104 crs. The PCR has come up down 1.52 to 1.41 indicates some weakness may be seen in the market.

IV in the market was 27.79 and HV was 24.86.

Among the Big guns, ONGC saw 7.92% rise in OI with prices coming down indicating short positions built up in the counter suggesting the counter may show weakness in the coming days. Whereas RELIANCE saw 4.37% gain in OI with prices closing down indicating selling pressure emerging in the counter suggesting further weakness in the counter.

In the TECH counters INFOSYSTCH saw drop in OI with prices coming down and closing near day/'s low indicating liquidation of long positions as market reacted sharply. If the market recovers we may see buying happening in the counter and shorts covering their positions. TCS, WIPRO & SATYAMCOMP saw gain in OI with prices coming down indicating short positions built up in the counter suggesting further weakness may be seen in these counters.

In the BANKING counters, SBIN & HDFCBANK saw drop in OI with prices fell sharply indicating liquidation of long positions and fresh built up of short positions indicating further weakness may be seen in the counter. ICICIBANK saw RISE in OI with prices coming down indicating liquidation of short positions built up suggesting further weakness in these counters.

In the Metal pack, TATASTEEL & SAIL saw rise in OI with prices falling sharply indicating short positions built up in these counters suggesting further weakness may be seen in these counters..HINDALCO saw gain in OI with prices going up indicating long positions built up in this counter suggesting further strength may be seen in this counter. HINDALOCO & STER saw gain in OI with prices coming down indicating short positions built up in these counters suggesting further weakness in these counters.

We feel that the volume and built up in OI suggests that market may show some weakness if it remains below 4180 levels where we may see fresh short positions built up in the market thus one should hedge the positions to avoid any unexpected direction the market. One should trade with strict stop losses to be adhered too.