Nifty discount narrows, OI up

F&O OUTLOOK

Strong buying in banking, engineering and power stocks lifted the markets in the last one hour, with the Sensex and Nifty registering modest gains.

After trading at a discount through most of the day, the Nifty April futures moved to a premium in the last hour as bears covered short positions around 4700 levels.

The Nifty April futures discount narrowed to five points on a closing basis, from the previous day's 33 points, and the open interest rose by about a per cent, indicating the creation of fresh long positions.

The trading in index options was listless. The Nifty PCR open interest remained unchanged at 1.14 as Call and Put options added open interest of around 4.7 per cent each.

Options data indicates Call buying at 4700 and Put short covering at 4800. Therefore, the Nifty is likely to trade in a range around 4700-4800 for some time.

According to Suresh Kumar Iyer, technical analyst, Asit C Mehta, the market is likely to be rangebound in the coming days and the fourth quarter results would be a major trigger.

The Sensex has been facing a resistance at 15896 (Nifty 4798) and support at 15297 (Nifty 4628) in the last three days.

If the Sensex moves below 15297 on a closing basis, it could slide to 15065-14755-14677 (Nifty 4540-4468) levels. Any break above 15896 on the Sensex would take the markets to the 16236-16452 (Nifty 4833-4916-4970) mark.