Strong support at 6000

F&O OUTLOOK

The markets could not hold on to their gains at opening bell on account of large scale profit booking at higher levels. Only small cap stocks posted modest gains.

The only consolation was the trading volumes, which were higher on the buy side than sales side, despite the negative breadth. This indicates that the uptrend is intact.

Siddarth Bhamre, derivative analyst of Angel Broking said that Thursday's market fall was a reaction to the weak global cues. Although Indian markets have outperformed the rest of Asia in recent times, decoupling was not possible on a regular basis.

There was writing of calls at the strike prices of 6,200 and 6,300 on Thursday, according to Bhamre. The open interest increased by 2.06 lakh shares to 18.20 lakh shares at the strike price of 6,200 and rose by 1.40 lakh shares to 4.03 lakh shares in case of the 6,300 options. Call writers expect resistance at these levels for now.

The selling of Put options near 6,100 and 6,200 strike prices suggests that 6,200 levels may be seen in the near future.

However it is advisable to book profit at higher levels.

The Nifty has a strong support at 6,000 as this has witnessed the highest amount of put writing.

The Nifty PCR fell sharply from 1.28 to 1.22 on account of short covering of Puts at the strike price of 6,000, indicating that Nifty was unlikely to fall below 6,000. The technical support is around 6,000 for Nifty and 20,000 for Sensex.