Indecisiveness persists

F&O OUTLOOK

After a positive opening, both the benchmark indices failed to cross Friday's high. The Sensex reverted from 15,661 levels to close at 15,505 and S&P CNX Nifty closed almost flat at 4497 after testing crucial level of 4531. The Friday's high was 15,700 for Sensex and 4548 for Nifty.

The F&O turnover on the NSE remained around Rs 40,000 crore in this month, indicating a lack of interest among the F&O players. The open interest in Nifty September futures has increased by 10.65 lakh shares in the last three trading days despite trading volumes of 134 lakh shares.

The increase in Nifty OI, accompanied by 15 points fall in Nifty September futures indicate that bears have increased short positions while bull operators remain cautious.

The OI in Infosys Technologies, ICICI Bank and TCS has increased in the last three days, with a fall in value, which suggests a build-up of short positions. Long positions have been created in TCS, Reliance Industries, Reliance Energy and State Bank of India, as the OI has increased with an upward movement in the market prices.

The Nifty Put/Call ratio has increased to 1.57 from the previous day's level of 1.50, as OI in Nifty Put options increased by 9.35 lakh shares and the OI in Nifty Call options declined by 1.04 lakh shares.

The trading pattern in Nifty Call and Put options suggests that bears are covering their positions in 4500 Call and 4,400 Put. The bears are writing out of the money Calls at 4600 and 4700, while buying Call at 4,400 levels.

The Nifty 4530 level is turning out to be a major barrier in the short-term, which once surpassed, should lead to new high to 4650. For tomorrow, Nifty support is seen at 4465/4480 and resistance at 4522/4547 levels.