Nifty futures trade at a discount

F&O OUTLOOK

The technical pullback of Monday failed to gather further steam on Tuesday. The Sensex and Nifty shed 50 per cent of yesterday's gains as the sentiment was weighed down by weak Asian indices and flat US bourses.

The Nifty futures closed at a discount of 14 points against a premium of three points yesterday and the open interest went up for the first time in the last four days, rising by six per cent or 6.30 lakh shares. This goes to show that bear operators did not square off their short positions, but rather initiated fresh shorts.

The Nifty PCR declined from 1.22 to 1.12 following fresh out-of-the money call writing. Call writing was seen at the 4800-5000 strike prices, which indicates resistance above the 4800 mark.

The bulls are, however, expecting support to emerge around 4,800 levels as the 4800 put options OI has increased by around three per cent.

The put writers squared off their positions at the strike price of 4500. With put writing taking place at 4600 and 4700 strikes, the Nifty is likely to find support at these levels.

Orchid Chemicals saw a huge build-up in long positions on expectations of a further price rise if Solrex Pharma makes an open offer. It has already bought eight per cent stake via block deals.

The pharma stock was up by 15.3 per cent. The open interest rose by 60 per cent to 61.07 lakh shares, which is almost 62 per cent of the total marketwide positions.