Indices could be headed higher

F&O OUTLOOK

The benchmark indices closed at all-time highs on Wednesday due to short covering and addition of fresh long positions.

The Nifty futures closed at 6,225 and the premium moved up from 12 points to 45 points. The trigger came from the late rally in Reliance Industries, ICICI Bank and State Bank of India.

The open interest in Reliance Industries futures increased by 12.82 lakh shares as the stock moved up by Rs 100 from its day's low of Rs 2,805 to close at Rs 2906.10. ICICI Bank January futures added open interest of 5.80 lakh shares, while the stock rose by four per cent to Rs 1283.

State Bank futures added 3.36 lakh shares in open interest, while the stock was up 1.43 per cent. The late surge in these key Nifty stocks points to a firm opening tomorrow.

Reliance Energy moved up by 4.2 per cent, while its OI declined by 7.62 lakh shares. Infosys Technologies remained steady on short covering, while TCS, Wipro and Satyam continued to reel under selling pressure. Tata Power witnessed profit booking in the morning and short covering towards the end.

There was a build-up in Call options at the strike prices of 6300 and 6400, as their implied volatility (IV) was on the lower side.

The FII statistics also show buying in call options. A derivative analyst at Angel Broking expects the market to face substantial resistance at 6200. A buy-on-dip strategy would be more rewarding than sell-on-rise, for the time being.