Anand Rathi - Daily Strategist - May 22 2007

The NIFTY futures saw a rise in OI to the 1.43% with prices opened high but thereafter remaining in a narrow range indicating aggressive on the part of bulls and bears .Market managed to remain above the 4200 levels which may give support to the market. Nifty futures premium disappeared due to liquidation of positions. The FII buyers index futures to the tune of 430 crs and buyers in index options to the tune of 192 crs. The PCR has come up from 1.44 to 1.47 indicates some buying may emerge in the market. The IV is around 21.60 levels indicating some volatile trading sessions ahead.

Among the Big guns, ONGC saw 0.24% drop in OI with prices finally coming out of the range thus forcing bears to cover their positions aggressively with fresh money also coming on the long side suggesting further strength in the counter. Whereas RELIANCE saw 4.03% rise in OI with prices moved up sharply and closed near day's high thus suggesting strength in the counter. The built up suggests that the overall rise in the price was mainly driven by long positions built up in the counter.

In the TECH counters, all the majors saw selling with OI either going up or down indicating we saw short selling as well long positions liquidating in the IT counters .INFOSYSTCH saw 2.08% rise in OI with prices closing on lower side indicating built of short positions in the counter. TCS, SATYAMCOMP & WIPRO saw built up in positions with prices coming down indicating short positions built up in these counters suggesting weakness in these counters.

In the BANKING counters, all the majors saw fall in the positions with prices coming down from highs indicating selling pressure emerging in these counters which signals of caution in the BANKING pack .The built up suggests that one should book profits in the BANKING counters.

In the Metal pack, TATASTEEL saw drop in OI with prices up significantly indicating aggressive short covering seen in the counter and fresh buying emerging in the counter suggesting strength in the counter. SAIL saw gain in OI to the tune of 5.21% with prices up indicating long positions built up in the counter suggesting strength in the counter. HINDALCO & NALCO saw marginal rise n OI with prices coming down indicating selling pressure emerging in the counters.STER saw marginal drop in OI with prices up indicating short covering seen in the counter.

We feel that the volume and built up in OI suggests that market may show some directional movement as there is good built up in open interest. Market may show further strength and we may see fresh buying emerging in the market if market sustains above 4240 levels One should trade with strict stop losses to be adhered too.

Anand Rathi - Daily Strategist - May 22 2007