The NIFTY futures saw a drop in OI to the 0.36% with prices down indicating liquidation of positions and fresh short positions built up in the market suggesting some weakness may be seen in the market..Market if it goes below 4200 levels then we may see further short positions built up in the market and liquidation of weak long positions. Nifty futures premium disappeared due to liquidation of positions during the last hour and nifty futures closed at 5 points discount to spot nifty. The FII were buyers index futures to the tune of 44 crs and buyers in index options to the tune of 100 crs. The PCR has come down from 1.48 to 1.47 indicates some weakness may be seen in the market. The IV is around 20.50 levels indicating some volatile trading sessions ahead.
Among the Big guns, ONGC saw 2.44% rise in OI with prices coming down indicating short positions built up in the counter aggressively thus suggesting weakness in the counter. Whereas RELIANCE saw drop of 2.06% in OI with prices moved down and closed near day's low thus suggesting long positions liquidating in the counter and the built up suggests that their may be some profit booking seen in the counter.
In the TECH counters, INFOSYSTCH saw rise in the OI with prices coming down indicating short positions built up in the counter suggesting some weakness may be seen in the counter. SATYAMCOMP saw drop in OI with prices remaining positive indicating short covering seen in the counter thus suggesting strength in the counter. TCS saw rise in OI with prices remaining positive indicating long positions built up in the counter suggesting strength in the counter.
In the BANKING counters, all the majors saw rise in the positions with prices coming down from highs indicating short positions built up in the counters suggesting some weakness may be seen in the overall BANKING counters.
In the Metal pack, TATASTEEL saw significant rise in OI with prices coming up indicating long positions built up in this counters suggesting strength in the counter .SAIL saw marginal rise in OI with prices down indicating some selling pressure emerging in the counter. HINDALCO, NALCO & STER saw rise in OI with prices coming down indicating fresh short positions built up in these counters suggesting further weakness may be seen in these counters.
We feel that the volume and built up in OI suggests that market may show some profit booking in the coming few days so one should not take aggressive positions in the market. Market may show further weakness and we may see fresh selling emerging in the market if market goes below 4200 levels One should trade with strict stop losses to be adhered too.
Anand Rathi - Daily Strategist - May 24 2007