The Nifty closed on Wednesday at 2,928.25, much above the resistance level of 2,850, on the back of buying in Reliance Industries and select blue chips. However, the Nifty closed the day almost near its technical resistance level. Hence, there is a possibility of a trend-line reversal. The index has technical support at 2,860 and resistance above the 3,000-level.

The Nifty moved up on expected lines after trading in a range of 2,600-2,800. F&O traders were writing 2,800-3,000 strike calls and 2,500-2,700 strike puts on expectations that the index may trade between 2,500 and 3,000.

Options traders unwound their positions at the 2,800 strike call and sold the 3,000 strike call. This indicates that traders expect the Nifty to trade between 2,800 and 3,000 and if we see unwinding of the open interest (OI) at the 3,000 strike call options tomorrow, the index may then move up to the 3,100-level.

F&O traders created fresh long positions in Nifty futures and several stock futures such as Reliance Industries, ICICI Bank, SBI, DLF and Unitech. Nifty December futures closed at a premium of six points to the spot market and added an OI of 2.77 million shares, which indicates a build-up in long positions.

The Unitech stock was in demand as its December futures added an OI of 6.23 million shares, while the stock was up by around 6 per cent. DLF gained 17.46 per cent on fresh OI build-up of 1.20 million shares. Suzlon and SAIL saw their OI up by 2.69 million shares each, while the OI of NTPC and Tata Steel rose by 1.30 million shares.

Reliance Industries jumped 9.6 per cent to Rs 1,227.20, its biggest gain since October 31, with foreign funds leading the buyers. December futures of Reliance added an OI of 500,000 shares, mostly through a build-up in long positions. Bharti Airtel and Satyam Computer were up 5 per cent each on short-covering of around 500,000 shares each.

source: business standard.

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

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