Indices may be headed higher

F&O OUTLOOK

The indices ended flat after a volatile day of trade. The markets had opened on a weak note following yesterday's last hour sell-off, with the bears pulling the benchmark indices close to their support levels. But a bull charge towards the end retrieved the situation.

The late charge should continue on Monday, the last day of calendar year. The Nifty is expected to hit its all time high of 6,185 and the Sensex should surpass 20,500. Going ahead, the Nifty is likely to target 6,300 and 6,350 levels and the Sensex should see 21,400 and 21,600.

The Nifty PCR moved up to 1.35 from 1.27. The Nifty Call options added 11.12 lakh shares and Put options added 18.92 lakh shares in open interest. An increase in Call options OI was seen at 6,100, 6,200, 6,300 and 6,400 strikes, indicating that operators were buying at-the-money

Calls and writing out-of-the-money Call options. Put options added 5.96 lakh shares at the strike price of 6,000, indicating this as a support base for the Nifty in the near future.

Among the Nifty stocks, long OI build up was seen in stocks such as Hindustan Unilever, National Aluminium, Punjab National Bank, Ranbaxy Laboratories, Reliance Energy, Tata Power and Tata Steel.

Fresh shorts were seen in Bharti Airtel, Dr Reddy's Labs, GSK Pharmaceuticals, ICICI Bank, Infosys Technologies, ONGC and Suzlon Energy.

Short covering was seen in ITC and Satyam Computer.