Rising PCR a sign of bullishness

F&O OUTLOOK

The Nifty opened flat and declined to a low of 5,055 before closing at the day's high of 5,200.70. The Nifty March futures closed at a discount of 28 points at 5,209, indicating roll-over of short positions by the bears.

The Nifty rollovers stood at 32.5 per cent, up from 25 per cent on Friday. Of the total Nifty futures open interest of 50.16 million shares, 16.40 million shares were rolled over to March. The stock futures witnessed rollover of 33.05 per cent compared with 22.5 per cent on Friday.

The markets are likely to break out soon, according to technical analyst Kamlesh Langote of vfmdirect.com, as the Nifty has found support at 5,050 for the third time in last two weeks.

The markets have taken four weeks to rollback the 8.7 per cent Nifty fall on January 21. This is a good sign and should lead to a sharp recovery.

The spot Nifty, which closed at 5,200 on Monday, has to pierce 5,300 if a triangle breakout is to occur, according to the technical analyst.

The Nifty PCR has increased to 0.98 from 0.89 on Friday. This is mainly due to the addition of 20.06 lakh shares in Put options compared with 5.34 lakh shares in Call options. This indicates that bulls are back in action.

The Nifty is expected to face resistance at 5300, where there has been a huge built-up of open interest since the last 2-3 days. However, the 5100 level can act as a support due to the activity seen in 5100 Put option.