Daily Strategist Note

The NIFTY futures saw a rise of 3.40 % in OI with prices opening high and closing low indicating selling pressure emerging at higher levels and fresh short positions built up in the market thus suggesting weakness may be seen in the market which may force longs to liquidate their positions if market not sustains above 4180 levels. The nifty June series futures discount came down from 42 points to 12 point indicating shorts covering their positions at lower end. Market if it sustains below 4120 levels then we may see further short positions built up in the market and longs liquidation. The FII were buyers in index futures to the tune of 646 crs and buyers in index options to the tune of 44 crs. The PCR has changed from 1.25 to 1.24 levels indicates some buying support may be seen in the market at lower levels .IV in the market was 27.95 and HV was 22.16.

Among the Big guns, ONGC saw rise in OI with prices coming up although market showing weakness indicating that the counter may show strength in the coming days. Whereas RELIANCE saw drop in OI with prices remaining in a range suggesting that both bulls and bears were liquidating their position in the counter suggesting that one should have neutral view on the counter.

In the TECH counters INFOSYSTCH & SATAYMCOMP saw drop in OI with prices moving down indicating long positions liquidating and fresh short positions built up in the counter suggesting some weakness may be seen in the counter. TCS and WIPRO saw built up in counters with prices coming down indicating built up of fresh short positions in these counters suggesting further weakness may be seen.

In the BANKING counters, SBIN & HDFCBANK saw rise in OI with prices facing resistance at higher levels thus suggesting if follow up continues we may see fresh short positions in these counters and further weakness may prevail. ICICIBANK saw gain in OI with prices remaining in a dull range thus one should have neutral view on this counter.

In the Metal pack, TATASTEEL saw marginal drop in OI with prices coming down sharply indicating long positions liquidating their positions and fresh short positions being built up in this counter suggesting weakness may be seen in this counter. SAIL saw drop in OI with prices down indicating longs liquidating their positions. HINDALCO saw drop in OI with prices remaining in a range thus one should have neutral view on the counter. NALCO saw gain in OI with stock saw buying emerging at lower levels thus suggesting further strength may be seen in this counters. STER saw built up with price facing resistance at higher levels suggesting weakness may be seen in this counter.

We feel that the volume and built up in OI suggests that market may show weakness only if it remains below 4100 levels where we may see fresh short positions built up in the market thus one should hedge the positions to avoid any unexpected direction in the market. One should trade with strict stop losses to be adhered too.