F&O Outlook: Nifty may settle below the 2,920 support today

The Nifty fell 2.32 per cent and closed below 3,000 at 2,968.65. On technical charts, if the Nifty closes below 2,920 points, then it is likely to move down further. The 2,900 strike put has open interest of 3.59 million shares, while 2,800 put has open interest of 3.72 million shares. This indicates that the Nifty is expected to settle between 2,800 and 2,900 tomorrow, the last day of the December series.

The day’s settlement data show that the Nifty December series shed open interest of 6.14 million shares, while 4.09 million shares were added in the January series. This means bulls booked profits and unwound their long positions, while bear operators rolled over short positions.

The December futures of the Nifty closed at a 4-point premium to the spot index, while the January futures ended the day with a premium of 14 points over the December futures.

The January series witnessed a rollover of 23.45 million shares, considerably higher compared to 15.09 million shares this time last month.

Today’s fall was led by construction and engineering firm Larsen & Toubro, down 4.9 per cent to close at Rs 774.85 on concerns about the economic growth in the near futures. The December futures of L&T shed open interest of 839,200 shares, while the January series added open interest of 534,100 shares, indicating unwinding of long positions.

Petrochemicals giant Reliance Industries fell for the third consecutive day on fresh short build-up in the January series. The December futures of Reliance shed open interest of 1.6 million shares, while the January series added open interest of 1.55 million shares, indicating short rollover. Traders expect that Reliance’s refinery margins would be affected due to the decline in crude oil prices.

Satyam Computer once again witnessed fresh selloff, this time on account of the World Bank barring the company from doing any business with it for the next eight year. The IT company’s stock closed at Rs 140.40, down 13.55 per cent as the January series witnessed short rollover of 5.86 million shares.