Anand Rathi - Daily Strategist, Technical Note - May 8 2007

The NIFTY futures saw a rise in OI to the tune 7.79% with prices coming down from high and closing in negative indicating short positions were built up in the market at higher levels indicating that if market remains weak today also we may see fresh selling emerging in the market .The discount in nifty futures widened and nifty futures closed at 12 points discount to spot nifty indicating aggressive short positions built up and profit booking emerging in the market at higher levels. The FII sold index futures to the tune of 42crs and buyers in index options to the tune of 21crs. The PCR has come up from 1.16 to 1.19 indicates some strength may be seen in the market. The IV is around 24.85 levels indicating some volatile trading sessions ahead.

Among the Big guns, ONGC saw 4.41% rise in OI with prices coming down 0.47% indicating shorts built up their positions and long positions liquidated in the counter indicating weakness in the counter. Whereas RELIANCE saw 3.38% drop in OI with prices coming down from high indicating selling pressure emerging at higher levels and drop in prices was mainly driven by profit booking and which is expected to be continued for few days.

In the TECH front, INOFSYSTCH& TCS, WIPRO & SATYAMCOMP saw rise in OI with prices coming down sharply indicating fresh short positions being built up in overall IT pack indicating some weakness may be seen in IT pack.

In the BANKING counters, SBIN saw rise OI to the tune of 0.06% with prices coming down and closing in negative indicating short position being built up in this counter indicating weakness may prevail in this counter.ICICIBANK saw rise in OI with fall in prices indicating short positions being built up in this counter indicating weakness in the counter. HDFCBANK saw rise in OI with drop in prices indicating fresh selling may emerge in the counter.

In the metal pack TATASTEEL saw rise in OI to the tune of 1.51% with price down to the tune of 0.54% indicating fresh selling happened in the counter suggesting weakness may be seen in this counter. SAIL saw rise in OI with rise in prices indicating fresh buying emerging in the counter suggesting strength in the counter. HINDALCO saw rise in OI with fall in prices indicating weakness in the counter. STER saw liquidation of positions with prices almost flat indicating buying emerging at lower levels indicating some strength in the counter.

The stocks to be watched in coming days would be MAHSEAMLESS, HINDPETRO, IOC, TTML etc.We feel that the volume and built up in OI suggests that market may show some profit booking in the coming days .Market may show weakness if it closes below 4050 levels where we may see fresh short positions built up in the market and long liquidation in the market. One should trade with strict stop losses to be adhered too.

Anand Rathi - Daily Strategist - May 8 2007

Nifty and Sensex have exhibited a narrow bearish candlestick.

Technically, one may use the level of 4080 (Nifty) and 13800 (Sensex) as the stop loss level.

Nifty faces resistance at 4185 and Sensex at 14225.

BSE Smallcap and BSE Midcap also exhibited bearish candlesticks.

CNX IT has lost ground.

In the Punter's zone we have a Buy in India Bulls & Sell in Polaris and Tech Mahindra.

In the Technical call section, we have a Buy in Crompton Greaves & Sell in Icici Bank and Satyam Comp.

Anand Rathi - Daily Technical Note - May 8 2007