Nifty continued to move northwards with minor hiccups, facilitating the index to surge by
more than 4 percent on a weekly basis on back of expanding volumes. Firm global markets
and expectation of strong Q4 earnings boosted the sentiments in the street. The mounting
inflation seemed to start losing steam as it plunged to 5.74 percent, below the anticipated
5.84 percent. The index sustained above its strong resistance zone of 3890-3900 levels with
renewed buying interest in Metal, Cement, Construction and Telecom space. Auto, FMCG,
Energy and Pharma sectors remained underperformer to the broader index.
Nifty futures witnessed lackluster activity during the week, with the April futures adding
marginal 5 lakh shares in open interest. The discount hovered at around 20 points for most
part of the week, down from 30 points last week. The total open interest in the index
futures stood at 3.63 crore shares, much below the all time high level of 4.04 crore shares
accumulated last month. The total market open interest rose significantly to Rs.51,910
crore from Rs.44,071 crore during the week. Among sectors, Metal stocks witnessed
significant accumulation of long positions. Bargain hunting crept into the stock at lower
levels, fueling the BSE-Metal index to surge up 7.89 percent during the week. Technology
sector witnessed closure of short positions. However, long accumulation was observed in
majority of the stocks on last Friday after the technology major, Infosys, unveiled its FY07
results and announced guidance as per the street expectations.
The Put-Call ratio of open interest started reverting back to the normal territory last week.
Sustenance above current levels will indicate the shift towards the positive sentiments. The
open interest concentration is at 3800 strike in Put options and at 4000 strike in Call options.
Volatility is expected to ease down in coming sessions, thereby inducing further stability.
The Nifty is expected to test higher levels of 3980-4000 this week.

Download Here