Still, the short term sentiment is bullish…
With the help of Firm trend in global markets, short covering in F&O segment and
better than expected quarterly earnings, NIFTY extended gains of 1.76 percent in
the preceding week. Q1 earning announcement for most of the heavy weight index
stocks are almost over. The volumes appear to have taken the south path all
through the week largely aided selling by the foreign institutions in the futures and
options segment. On the Futures & Options front, the NIFTY August futures open
interest improved against previous week coupled with positive cost of carry
suggesting bullish signal. NIFTY August futures trading at a narrowing premium of
around 2-5 points against spot market over a couple of days.
The Put-Call ratio ofopen interest slithered from 1.46 to 1.10 against preceding week as Call options
ruled the accumulation over the Put options. The implied volatility (IV) trend of Put
options indicates short build up in the beginning of the week and reversal towards
the end. The IV of Call options rose initially; however, the Nifty is restricted to move
around the 4700 mark reflected by the shorting of higher Call options. Considering
the above said factors, nothing is changed since last week, still the short-term
sentiment is bullish and if NIFTY sustains above 4693 levels we may see the rally
upto 4910 levels. The weekly key support is likely to be seen at 4530 and 4474
levels.
Post Market Analysis
Domestic market concluded the week in the positive terrain on account of sustained
buying. Favorable global cues, mainly from Asian markets contributed to the sharp
rally. The rollover of Nifty positions for July 2009 series stood at 69% versus 63%
last month while market wide rollover of positions was at 75% versus 77% last
series. 22
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