F&OTracker Strong Resistance Seen at 7500 Levels
The final week of the May F&O series started on a positive note on Monday as Nifty futures crossed the 7500 psychological mark on intraday, but couldn’t sustain at the higher end and was dragged down by profit-booking in the market, which continued even yesterday to close slightly above the 7300 level. Nifty futures during the May series has witnessed considerable addition of long positions in the market, as the futures open interest has increased quite significantly from 1.50 crore to around 2.80 crore with an increase in price by around 6%. The rollovers till now are seen better compared to the April expiry and in line with the March expiry.
On the options side, the put-call ratio open interest has remained below the one psychological level, seeing consolidation in the range of 0.70-0.82 in last couple of weeks, mainly on account of heavy call writing activity seen at out-of-money strike prices. Even the FIIs are seen active on the call writing side, as the index option open interest has increased sharply by 150% and net heavy sellers to the tune of ` 4,100 crore with PCR OI remaining sideways below one level. The maximum OI concentration of call options, post Monday’s profitbooking led to a shift at lower level from 8000 to 7500 strike price, indicating as a stiff resistance ahead of the expiry, whereas for the put option, it is still intact at 7000 strike price.
Technically, Nifty futures holds important support at 7210-7200 levels. Till it continues to hold above these levels, the trend is likely to remain sideways to positive, whereas on the upside, buying strength may emerge in the market above 7360 levels on a sustained basis and can see momentum towards 7440-7470 levels. Cautious is advised below 7200 levels.
Bharat Forge has given a strong breakout above 495 levels with strong volumes and rise in open interest indicating strength in the stock. It can target towards 550-570 levels in short term.