Bears gaining the advantage

F&O OUTLOOK

Nifty opened in a positive territory, but could not hold on to its gains. It again faced resistance at 6340 and could not sustain above 6300 for the third time.

According technical analyst Ashish Shroff of Ambit Capital, the Nifty faces a trend reversal at 6080. The momentum indicators on daily charts turned into sell mode on Thursday, suggesting selling pressure at higher levels.

The support and trend reversal for Nifty on the downside is at the 20 days moving average (DMA), which is 6080. The short term trend for Nifty would reverse to down, on a close below 6080.

The Nifty PCR declined to 1.33 from 1.37. The fall in PCR open interest and the discount in Nifty futures shows that market participants are jittery about taking long positions given the the weak global cues.

Put writing was seen at the strike price of 6,400, with OI increasing by 1.52 lakh shares. There were no sellers of Call options at 6,100, 6,200 and 6,300, indicating that Nifty may decline below 6,100 level in the short term.

The bull-bear tussle over the extremely critical Sensex level of 21,000 continued for the third consecutive day with the bears gaining the advantage. The correction on Thursday was so severe that it forced the indices to close around the day's low after a remarkably good first half session.

The advance decline ratio was severely affected, with nine out of every ten stocks in the red. Only four of the Nifty components, ICICI Bank, BHEL, Unitech and Idea Cellular, ended in the green.