Fresh long positions seen

F&O OUTLOOK

The derivatives turnover on the National Stock Exchange (NSE) increased by Rs 12,500 crore to Rs 82,362 crore on Tuesday. Despite the huge turnover, the open interest rose by merely Rs 7,000 crore to Rs 89,157 crore.

The 1000 points Sensex rally from the day's low of 17,282 caught the bears off-guard and led to massive short covering. Yesterday's options data indicated some fire works on Tuesday as Put buyers were seen encashing their puts when Nifty corrected sharply by 250 points from the day's high.

Market observers expect profit booking tomorrow, at higher levels. However, the near term target for Sensex is around 19,500, while the Nifty may cross 5,750. October 11 and October 12 are crucial for the markets.

Kamalesh Langote, technical analyst, vfmdirect.com expects the Sensex to rise from 18,000 to 19,000 and Nifty to cross 5,700 much quicker. The long term support is near 17,000 for the Sensex and 5,000 for Nifty.

Infosys Technologies will declare its second quarter numbers and guidance on October 11. The annual general meeting of Reliance Industries will be held on

October 12, where Mukesh Ambani is likely to announce a stock split. However, correction is expected after the corporate numbers for the second quarter ended September 2007 start flowing in.

The open interest in Nifty October futures has increased by 3.35 lakh shares. Nifty October futures are trading at a premium of seven points to spot Nifty, which suggests the creation of fresh long positions.

The Put Call ratio of Nifty OI has also increased from 1.29 to 1.33. The Nifty Put options added OI of 14.27 lakh shares, while Nifty Call options added OI of 5.10 lakh shares.