| The bulls literally forced the bears to run for cover. Bears covered short positions during the last two days of the August series expiry. |
| The Nifty journey from 4100 to 4464 was spectacular and the index may move to 4490, the next strong resistance level as the global cues are begin. Technically, 4380-4420 should act as a strong support level now. |
| The Nifty closed above the 50-day moving average of 4,374 on two consecutive days, indicating that the correction phase is over. |
| The Nifty September series futures also showed sharp gains with the discount to the spot Nifty declining from 62 points to 40 points. The Nifty is now heading for 4,500 where it will face strong resistance. |
| However, it may be premature to say that the bull market is truly back. The September series contracts on Friday witnessed 36.6 per cent increase in the open interest despite trading at a huge discount of over 40 points. This means bears continue to build short positions and may strike back later. |
| The put/call ratio (PCR) of the Nifty open interest has increased further to 1.47 from the previous day's 1.37. The Nifty support and resistance on the basis of the open interest in the put and call options are 4,400 and 4,500, respectively. The Nifty 4,400 put options added 12.65 lakh shares while the Nifty Call options added an open interest of 7.99 lakh shares at 24.92 lakh shares. |
| It is widely believed that derivatives players are typically wrong on the market and thus use contra-market indicators. In other words, overwhelmingly buying calls are bearish and put volumes at extreme levels are bullish. |
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