F&OTracker Strong Re­sis­tance Seen at 7500 Lev­els

The Economic Times - - Markets & Finance -

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.

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