Market Technicals - Dec 7 2011

Nifty December futures open interest increased to 22.56 million shares from 21.98 million shares. Most of the accumulation seems to be on the short side as indicated by FIIs index futures segment. FIIs turned net sellers to the tune of Rs2.16 billion along with an increase of 4.86% shares in open interest. With no incremental long accumulation observed in the up move and the subsequent short build up on a halt in the rally in the index suggest cautious sentiments prevailing in the street.



Nifty put-call ratio of open interest declined to 1.25 levels from 1.31 levels. The ratio is unable to sustain at higher levels. The sharp declines on a modest sell-off suggest lack of confidence prevailing on upsides. Among Nifty call options, highest concentration is seen at 5100 strike with an open interest of 6.06 million shares (Rs31.48 billion). It is followed by an accumulation in 5200 strike with an open interest of 5.60 million shares (Rs29.47 billion). Data suggest resistance to continue to prevail at higher levels of 5070-5100