WAIT AND WATCH

Nifty opened with a negative bias, taking cues from the international markets, which were deep in the red on Tuesday, but somehow managed to close on a flat note, with apparently no damage, mainly because market participants were unwilling to carry positions in this truncated week. Nifty future closed at 5258, 38 points premium to the spot, marginally higher than the last session, but the futures closed after considerable loss in open interest, which was almost the same amount that was added in the previous session. On the options side there was considerable addition in open interest right from 5100 to 5600 calls for the second consecutive day, while on the Put side the 5300 put shed the maximum open interest followed by the 5200 and 5400 puts, while there was heightened activity in the 5000 put, adding the maximum open interest with huge volume, followed by the 5100 put. This entire activity on the options side indicates shorting at the higher levels and the entire activity getting concentrated between the 5000 to 5200 levels on the Nifty, which will act as a decisive range in the days to come. The PCR reduced from 1.09 to 0.96, the advance -  decline figures were 501 advances to 994 declines, and FIIs and DIIs which turned net sellers to the tune of 504 crores and 129 crores respectively, confirmed the negative trend. The technical indicators are still in sell mode and the key level to watch out for Nifty on a closing basis will be 5150, which acted as a breakout level on 2^nd February 2012, any close below this level may create panic and take Nifty to 5060 levels. On the international news front, the U.S. initial jobless claims data was higher than expected, while the ECB kept the benchmark rates unchanged and the president of ECB expressed confidence that the Eurozone economy, may start improving in the later half of 2012 and the LTRO will help in stabilising the eurozone economy in the short term, the European and asian markets were trading in green for most part of the day.

Stock Pick

SBIN – Short 2167, 2188, SL  - 2193. TGT – 2110, 2076

LT  –    Short 1255, 1273, SL - 1297. TGT – 1214, 1191