MUMBAI: Snapping the three day winning streak, stocks fell on Tuesday as weak opening of European markets weighed on investor sentiment. Profit booking was mainly observed in banking, oil and gas and IT stocks.

National Stock Exchange’s 50-share Nifty closed the day at 2757.45, lower by 0.71 per cent from the previous close. Intraday, the index touched a high of 2805.60 and low of 2738.70, a band of 67 points. Top Nifty losers were TCS (-4.28%), Punjab National Bank (-4.08%), State Bank of India (-3.75%) and Tata Communications (-3.4%).

In futures, Nifty March provisionally ended at a discount of 1.45 points to the spot. The contract price slipped 0.66 per cent while open interest added 26 lakh shares. The sell quantity was higher than buy quantity suggesting unwinding of long positions and moderate build up of short positions in the contract.

Nifty April contract, on the other hand, ended at a widening discount of 7 points indicating short rollovers. The Nifty April price dropped 0.58 per cent while OI added 14 lakh shares.

Huge build up of positions at Nifty March 2800 put and call suggests players have formed a long straddle at this level to safeguard from any abrupt movement on either side. Huge buying of put and call was seen at 2800 strike.

Little put buying was observed at 2750 strike while solid put writing witnessed at 2700 strike and unwinding of long puts observed at 2600 strike indicating the 2700-2600 zone will act as a strong support in near term. On the other hand, moderate call buying was seen at 2700 strike. Significant call writing was seen at 2900 and 3000 strikes which will act as a resistance zone for Nifty going ahead.

“Given the build up at 2800, I think players have formed long straddle to profiting from the Nifty movement. At current levels the market will be directionless and will remain volatile in the near term. I will advise players to trade with options with strict stop losses,” said Anand Kumar, analyst at DBM Capital Advisory.

Among stocks futures, Reliance Industries March fell 1.73 per cent while open interest added 1.56 lakh shares. ICICI Bank March slipped 0.08 per cent while added 34 lakh shares in OI. State Bank of India futures attracted short positions in the contract. The price dropped 3.75 per cent and added 3.61 lakh shares in OI.

DLF fell 3.30 per cent adding 3.48 lakh shares in OI. Tata Steel skid 0.30 per cent while added 17.9 lakh shares in open interest. Reliance Capital slid 1.30 per cent and OI added 10 lakh shares. Axis Bank slumped 5.12 per cent and HDFC Bank fell 0.9 per cent.

Meanwhile, stocks fell in Europe for the first time in six days as rising credit-card defaults at American Express dragged financial shares lower. Asian shares rose, while US index futures fluctuated between gains and losses.

source: Economictimes

Tags: calls, daytrading, free calls, intraday, tips

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