Market positive in near term

F&O OUTLOOK

The consolidation that began last Monday is likely to halt at around 15,500 levels for the Sensex and 4500 for S&P CNX Nifty. The crucial resistance level for spot Nifty is at 4520-4530 and Nifty September series is at the 4,500 mark.

The F&O segment witnessed lacklustre trading on Monday, with the turnover on NSE declining by Rs 11,000 crore to Rs 34,492 crore.

The Nifty September futures added open interest of 21.47 lakh shares on a turnover of Rs 7,180 crore. The advance decline ratio on NSE was healthy at 848:276 and the cash markets turnover declined by around Rs 1,000 crore.

The trend for tomorrow remains positive as long as Nifty holds Monday's low of 4,452. If the Nifty falls below 4,452 levels, it can go to 4,389.

According to Kamalesh Langote, BFM direct.com, an upside could lead the markets to strong resistance area near 4,500 levels. Manas Jaiswal, derivatives analyst, Emkay Shares expects new highs only if Nifty crosses the 4,530 levels.

According to a technical analyst at JM Financial Services, a consolidation or pullback could be witnessed around 15500 for Sensex and 4500 levels for Nifty early this week. Most indicators point at the 14900-15100 levels for support during any pullback.

The Nifty Put/Call ratio moved up to 1.60 on Monday from 1.45 on Friday. The Nifty put options added 19.79 lakh shares and Nifty call options added 1.46 lakh shares.

The open interest positions in Nifty put and call options suggest a resistance at 4,500 and support at 4,400 . The Nifty 4400 put added OI of 7.7 lakh shares, while Nifty 4,500 call added OI of 2.51 lakh shares.

It is believed that the derivatives players are typically wrong on the market. Thus contra-market indicators are used. Overwhelming call buying is bearish, while high puts are a bullish sign.