Uptrend could continue

F&O OUTLOOK

The strong gap-up opening was followed by a heavy dose of profit booking in the afternoon. The derivatives players were busy rolling their F&O trades, with only a day left for the expiry of October contracts.

As a result, Nifty reacted sharply from its day's high of 5,578 to close at 5496, up 25 points, while the Sensex retreated from day's high of 18,832 to close at 18,513, up 20 points. 

NIFTY ROLLOVER
(Nov Future)	Rollover (%)	OI ( '000)
NIFTY	56.42	25103
GTL	91.37	10248
S Kumars NW	83.56	11604
JSW Steel	80.96	2344
Tata Chem	80.03	5804
Ballarpur Ind	79.44	3943
Sun Pharma	76.80	1127
Aban Offshore	76.09	796
Lupin	74.72	1740
Century Textile	74.29	4852

Though the benchmark indices erased all early morning gains on profit booking, the advance-decline ratio was healthy at 1.28:1, indicating a continuation of the uptrend till 5,450 holds on the Nifty.

The Put call ratio moved down marginally to 1.17 from 1.18 as Nifty Put options added OI of 9.59 lakh shares, while Nifty Call options added 9.69 lakh shares in open interest.

The Nifty has a support at 5,000, as 11.7 per cent of total Put OI exists near this level. There is further support at 5,100, 5,200 and 5,500.

However, the call options data does not show any resistance levels as in-the-money calls account for almost 75 per cent of the total call open interest. Institutions seem to have bought in-the-money calls, which is a bullish sign.

The Nifty looks positive on the charts, having closed above the 10 day simple moving average. One could expect fresh momentum if Nifty crosses 5660 or closes above 5525.

Else, the Nifty could test 5070 or a new low. The five days relative strength index (RSI) at 59 and 14 days RSI at 62, do not suggest overbought positions.