MUMBAI: Markets edged lower once again in intraday trade yesterday as GDP numbers were below market expectations. The positive factor however remains that we bounced back in trade to end in the green once the Nifty found support at its 200 DMA of 4650. |Global cues was also one of the reasons for a bounce back indicating that it could be a part of the intermediate global rally

The Nifty February Futures ended at 5 points premium as compared to a discount over the last few days as it shed 84000 shares in open interest giving one a sense that short covering did take place. Of course a lot of intraday longs booked profits near days end as well indicating lack of conviction of bulls at current levels.

Stock futures added 2.8 cr shares while turnover remained above the five day average on a day of a bounce back, once again a positive cue. FIIs too seem to have bought at lower levels and hence emerged as net buyers of Rs 405 cr with over Rs 700 cr buying seen in the Index Options.
 
What does the options data indicate?
Activities from the FIIs indicate that our markets are currently in an option driven state with the Nifty Put Call Ratio at at 1.02. At the lowest point in the last 6 months the PCR has been 0.86 so though one could see a sharp recovery in the days could come there is a still marginal room on the PCR front for a decline as well.

The 5200 Calls added nearly 3 lakh shares yesterday while the 5000 Calls added 1.7 lakh shares indicating resistance at higher levels of 5000 while Put build up at lower levels of 4700 and 4600 which added nearly 3.5 lakh shares each suggest support near yesterdays lows of 4650 may hold.

Individual stock movements
While the markets saw a sharp recovery and front liners like Bharti, ONGC manage to end in the green and even as infra counters remained strong in trade it was the metal counters that underperformed in trade suggesting weakness in these counters.

Chambal Fertilisers
Stock gained up 7.5% as it added 16.8 lakh shares in open interest which accounts for 29% of its total open interest. The implied cost of carry improved
 along with a price rise suggesting build up of Fresh longs

Lanco
Stock up 6.7% as it shed 8.5 lakh shares in open interest suggesting short covering took place as it shed 2.6% of total open interest in trade yesterday

Tata Steel
Stock ended down 3.4% despite a recovery on the bourses. The F&O segment added 10.5 lakh shares as the implied cost of carry improved indicating the build up of fresh shorts in the counter