Strong support at 19,300

F&O Outlook

The market discounted the CRR rate hike, with both the Sensex and Nifty closing the week on a positive note. The indices bounced back from their weekly lows and this is likely to trigger a further up move next week.

According to a technical analyst with Angel Broking, the 'V' shape pattern formed on the daily charts will lead the Sensex to 20,350-20,400 and the Nifty to a comfortable 6,130-6,150.

By taking support at 19,250-19,200, the Sensex filled the corrective gap and bounced back to give a positive weekly close. The positive close, despite the 25 basis points rate cut by Federal Reserve and the global weakness, confirms the continuation of the upmove.

According to Angel Broking, the indices are likely to touch 21,300-21,400/6300-6330 in 2-3 weeks, provided they overcome the resistance at 20,238/6012. Any intra-day correction would be a buying opportunity, for the short term traders. Further, the indices have a strong support at 19,300 - 19,260 / 5730 - 5700. A close below these levels would trigger a deeper correction, but this seems unlikely at the moment.

The open interest in Nifty futures has risen by 6.62 per cent on a weekly basis. This is however less than what is generally witnessed in the first week after expiry. Significant positions have been added in individual stock futures. Refinery stocks such as Reliance Industries, Reliance Petroleum, MRPL, Bongaigaon Refineries and financial counters including Reliance Capital and HDFC have seen a significant addition in long positions.