Bullish outlook on the market

The trading activity in the final hour on Friday signalled bullishness, going ahead. However, if the past is any indication, the markets tend to have one good week, only to follow it up with weakness in the subsequent week. What happens on Monday will thus be a trend setter.

The markets opened on a weak note on Friday, the first trading day of the new January series, with the bears pulling the benchmark indices close to their support levels.

The reversal came towards the close, with the Nifty moving up from the day’s low of 6,022 to close at 6,080. The late charge should continue on Monday, the last day of the calendar year.

The Nifty is expected to hit its all time high of 6,185 and the Sensex should surpass 20,500. Going ahead, the Nifty is likely to target 6,300 and 6,350 levels and the Sensex should see 21,400 and 21,600.

According to a technical analyst at Motilal Oswal, the uptrend is expected to resume from the January series. The Nifty is expected to move towards the initial target of 6,185 as the undercurrent is still strong.

On a weekly chart, the spot Nifty has already crossed the previous week’s close of 6,040 and is now at the verge of testing the all-time high of 6,185.

An increase in Call options OI was seen at 6,100, 6,200, 6,300 and 6,400 strikes, indicating that operators were buying at-the-money Calls and writing out-of-the-money Call options.

Put options added 5.96 lakh shares at the strike price of 6,000, pointing to this as the support base for the Nifty in the near future.

Among the Nifty stocks, long OI build-up was seen in stocks such as Hindustan Unilever, National Aluminium, Punjab National Bank, Ranbaxy Laboratories, Reliance Energy, Tata Power and Tata Steel. Fresh shorts were seen in Bharti Airtel, Dr Reddy’s Labs, GSK Pharmaceuticals, ICICI Bank, Infosys Technologies, ONGC and Suzlon Energy.