Bounceback may be imminent

F&O OUTLOOK

The Nifty witnessed profit taking above 6,000 after a strong opening. But an encouraging sign of Thursday's trading was the premium of 29 points on the Nifty January futures and a 4.23 per cent decline in open interest. These developments will have a positive impact on the markets going forward.

However, Call writing increased substantially at 6,100 (OI up 3.19 lakh shares), 6,200 (2.84 lakh shares) and 6,300 (2.20 lakh shares) strike prices. The open interest at the above levels accounts for 41 per cent of the total Call options open interest.

On the flip side, Call buying was seen at 6,000 levels. The 6,000 Call options added open interest of 6.12 lakh shares at an average premium of Rs 131.19 a share. Put options were also written at 6,000 as the OI increased by 1.46 lakh shares to 25.54 lakh shares.

The Nifty PCR declined further to 1.11 from 1.22 as open interest in Call options increased by 17.27 lakh shares, as against an increase of 3.93 lakh shares in Put options. The market seems to be getting oversold and hence a bounce back is possible.

The Nifty top gainers witnessed strong short covering. The January futures of National Aluminium gained 5.92 per cent on a three per cent decline in open interest, ITC was up 3.87 per cent while OI declined by 5.34 per cent, Siemens appreciated by 3.88 per cent and OI came down 6.26 per cent and L&T rose 2.18 per cent accompanied with a 3.57 per cent decline in open interest.