Bull rally likely to continue

F&O OUTLOOK

Infosys Technologies holds the key to yet another gap-up opening tomorrow. Better than expected Q2 numbers and upward revision of the FY08 guidance may trigger yet another firm opening, taking the 30-scrip BSE Sensex past 19,000 levels. The S&P Nifty is likely to zoom past the 5,500 levels, as it moves in tandem with the Sensex.

The F&O data suggests continuation of the bull rally, with fresh built-up in long positions in Nifty October futures.

The Nifty futures premium increased to 16 points from seven points yesterday and almost all the key stock futures are trading at a premium. This indicated that market players were keen on increasing long positions, even at a premium.

The option data also suggests that bulls are not ready to give up easily. Out of the money Call writing was seen above 5,500 and 5,600 levels on the Nifty, while profit booking was seen in almost all in-the-money Calls.

The Put writers also preferred to write out-of-the-money Puts as open interest near Nifty strike price between 5,100 and 5,400 increased by almost 16 lakh shares.

The Reliance pack continued to hog the limelight, with Reliance Communication seeing fresh long positions. However, there was profit booking in Reliance Energy. Reliance Energy shed five lakh shares in open interest as the October futures closed at Rs 1,584.60 from the day's high of Rs 1631.50.

Though the open interest in Reliance Industries increased by 13.62 lakh shares today, the stock witnessed heavy profit booking at higher levels. Reliance futures closed at Rs 2,630, below the day's opening of Rs 2,640. This indicates that the stock has steamed out and further profit booking is not ruled out.

Long positions were also seen in Infosys Technologies, ahead of its Q2 results.