Strong support at 5900

F&O OUTLOOK

The Nifty and Sensex could not sustain above 6,000 and 20,000 respectively due to profit booking at higher levels.

The Nifty December futures faltered from the day's high of 6,049 to close at 5,984. They added OI of 31,270 contracts despite trading volumes of 4.04 lakh contracts.

The FII data suggests the creation of short positions in stock futures. However, market participants seem to have gone long on the Nifty.

There was additional OI built-up around the strike price of 5,900 and profit booking in out-of-the-money puts, which indicates that 5900 may act as a support for the time being. Call writing was seen in the 6000, 6,100 and 6,200 strike prices, indicating a strong resistance above 6000 levels.

A close above 20,000 on the Sensex and 6,000 on the Nifty would require the participation of large cap stocks, according to Sailav Kaji of PINC Research. Banking and oil stocks, which have gained momentum in recent times, are likely to be the front runners in taking the indices to higher levels.

The markets opened on strong note on Thursday due to the participation of large cap stocks such as Reliance Industries, ICICI Bank, State Bank of India and ONGC.

However, profit booking was seen on Reliance Industries at higher levels. The stock closed 1.1 per cent lower, while the OI increased by 6.3 lakh shares. ICICI Bank firmed up by 3.37 per cent on account of short covering and the OI declined by 2.48 lakh shares.