All throughout the week, the market remained absolutely flat despite rocking start to the earnings season on the back of encouraging numbers from Infosys. The IT bellwether reported better-than-expected Q3 results and also revised upwards its earnings and revenue guidance for the year ending March 2010 on improving trend for outsourcing orders. Despite this the S&P CNX Nifty remained absolutely flat rising by just 7.45 points to close at 5252.40. On Friday the nifty corrected by 7.70 points. The nifty futures continued to remain at a premium and on Friday closed at a marginal premium of 2.20 points. The market continued to remain directionless, as there was call and put writing from the 5100 to 5400 strikes. The average volume in the futures and options (F&O) segment during the week under review was Rs 58279.75 crore, thus remaining more or less at the same level compared to the previous week.
In the futures segment the nifty future added just 6.40 lakh shares in open interest (OI) and towards the end of the week there was some amount of short positions being built-up. On Friday the nifty added 1.90 lakh shares in OI to take the total OI to 2.48 crore shares. In the stock future front the directions were mixed. Reliance future added just 0.49 lakh shares in OI through-out the week to take the total OI to 1.13 crore shares, while Infosys, ICICI Bank and DLF added 2.53 lakh shares, 12.78 lakh shares and 13.21 lakh shares in OI to take their OI to 28.62 lakh shares, 1.12 crore shares and 1.57 crore shares respectively.
FOR THE PAST SIX MONTHS:
On the other hand Tata Steel, Tata Motors, Unitech, Sail and Rcom shed their OI during the week. Tata Steel shed 9.82 lakh shares while Tata Motors shed 1.74 lakh shares in OI. Unitech shed 35.1 lakh shares in OI during the week. Some short built-up in some of the mid cap stock futures counters was also seen along with negative indicators in some of the stock option front. The stock future & option segment witnessed significant addition in OI compared to the previous week.
Thus the overall inference remains inconclusive. It seems the overall market will remain horizontal all through out the earnings season. Thus any significant move in either direction will depend on global liquidity environment and the global markets.
Overall the market wide OI on Friday stood at 204.93 crore shares. Of these major additions in OI was witnessed in the stock futures and options segment.
The most active options in the January series were the 5100 to 5400 strikes. The call option on the above mentioned strikes witnessed aggressive writing, while there was some amount of put writing in the above-mentioned strikes. The OI in 5200 and 5300 calls increased by 2.38 lakh shares and 13.36 lakh shares while there was call long covering of the 5000-strike call. Thus for the index the 5300 level will remain as an immediate resistance while the trading band will remain at 5000 to 5300 levels. The OI in 5100, 5200 and 5300 strike puts increased 10.04 lakh shares, 7.39 lakh shares and 5.95 lakh shares respectively. (See most active
Expectations of strong Q3 December 2009 results and ample global liquidity may keep Indian stocks firm in the near term. A number of top firms like Jaiprakash Associates, GAIL India, Sesa Goa, Tata Power, Wipro, HDFC, Bharat Heavy Electricals, ICICI Bank and L&T will unveil their Q3 results in the next. Besides the global liquidity situation and the global market will remain the key. 5000 to 5300 will remain the trading band with immediate resistance at 5300 levels.
