The markets are expected to remain rangebound as they continue to trade in the 2,750-2,900 levels.
The trading in Nifty options suggests that the broader range for the February series appears to be at 2,600-3,000 levels. Technically, the Nifty closed in a bullish candle near 2,850, which is also 38.2 per cent retracement of the fall from 3,147 to 2,661. The confident crossover of 2,850 would be the key to continue with the recovery.
According to Nitin Murarka, head-derivatives, SMC Global Securities, the prevailing heavy short positions and short rollover in the stocks had helped the index sustain above 2,800 levels.
The Friday trade witnessed significant short covering, which helped the broader index to close above 2,800 levels. A move above the 2,880 level would take the Nifty to around 3,000 levels. On the other hand, we are likely to re-test the 2,500 level if the Nifty failed to hold on to 2,700 level. The week saw the Nifty March futures being traded at a discount of 5 points to the Nifty February futures, indicating lack of aggressive participation.
At the same time, the discount between current month spot and futures continued to narrow in the last few sessions indicating short covering in the current month contracts, says Murarka.
The options OI remained skewed towards puts as the surges induced profit-taking in call options while lower strike Puts witnessed writing. Significant OI build-up seen in put options strikes indicates put writing.
The open interest concentration has shifted to the 2,500 and 2,700 strikes put option while the 2,900-strike call has witnessed addition on the long side in Friday’s session.
With the major heavyweights indicating positive sentiments during the Friday’s session, analysts expect to see a good opening going forward.
