THE ROAD AHEAD

Nifty opened on a flattish note, and made a high of 5445, mainly on the expectations of a bold budget, but it turned out to be a fiasco, and the market responded aptly, by making a low of 5305, before closing at 5317, 1.16% down.The entire market breadth was extremely negative with 449 advances to 1035 declines, while the FIIs were net buyers to the tune of 883 crores, the DIIs were net sellers to the tune of 770 crores. The only stocks that were up were ITC and M&M. The Nifty futures closed at 5342, 25 points premium to the spot, and with considerable addition of open interest. On the options side the PCR increased to 0.99. There was a considerable addition of open interest from 5200 to 5600 calls with corresponding shedding of open interest from 5200 to 5600 puts, while the 5100 put added the maximum open interest.  The entire activity on the options side suggests that there was some profit booking in the profitable puts, with considerable call writing at higher levels, which may act as huge detterent in the week ahead for Nifty. While the overall market picture is clear, with the major events behind us, the markets participants will focus on the not so encouraging advance tax figures as well as the resolve of the government towards honoring the commitments made in the budget. The levels to watch out for Nifty tomorrow, will be 5350,5406 on the upside and 5266, 5253 on the downside.