Nifty seen heading north

F&O Outlook

There has been a strong OI build-up in Nifty 4200 Put options, indicating strong support near the 4200 levels. The emergence of strong support at the 4200 level, accompanied with the bounce-back from lower levels on Friday and the Nifty futures trading at a premium indicate an uptrend for the immediate future.

The market had a flat week-on-week closing, amidst volatile trading. The S&P CNX Nifty struck an all-time high of 4,269.35 during the week, but closed marginally lower.

The Nifty 4200 put OI increased by 25.9 lakh shares during the week. It was at 47.4 lakhs for the week, as against 21.5 lakhs for the previous week. The 4100 put also saw a rise from 38 lakh shares to 47.5 lakh shares. Hence, 4200 and 4100 are important levels to watch on the indices in case of a downside. 

F&O SNAPSHOT
	Turnover (Rs crore)*		Open int ('000)**
	May 18, 07	May 25, 07	May 18, 07	May 25, 07
Nifty	59801.77	64682.65	64462	77724
BANKNIFTY	731.64	534.73	290	255
CNXIT	172.07	225.23	127	190
Stock	93561.88	110355.9	1424466	1544732
NSE Total	154267.4	175798.5	1489345	1622902
*Weekly aggregates notional Value  **In shares

The 4200 call increased from 26.3 lakh shares to 36.3 lakh shares during the same period, adding 10.2 lakh shares. The Nifty PCR (OI) was 1.44 against 1.45 last week.

Zeal Mehta, derivatives analyst with Emkay Securities, is bullish on the Nifty for the immediate future. He is positive on the IT and telecom sectors, given the huge build-up in CNXIT futures and a majority of IT stocks, during the week.