In today’s trade, the Nifty found support at 3900. Traders were seen covering their short positions around this level. The negative cost of carry narrowed down to just about 3 points on the Nifty January futures. Apart from short covering, there were some fresh long positions being taken as well.
Among individual stock futures, MTNL is looking very strong. It saw a 90% roll over of positions to this month and we’ve been recommending it from Rs.140. ICICI Bank has held well in the past 2 days of correction and one can expect some good upside to it.
The implied volatility has been 26% and we advice investors to be cautious. The volatility is expected to continue for few more sessions.
- Zeal Mehta, Derivatives Analyst, Emkay Stock Broking
Nifty has strong support at 3,900
The FII taxation issue played a dampener today. The day traders took up this opportunity and added to the panic by taking short positions. However, the strong support for the Nifty at 3900 still holds its place. We saw the markets recover partially at the fag end of the trading session. That was on account of day traders covering up their short positions. The Nifty closed at 3911, which is above its support of 3,900. Infosys’ quarterly results on Thursday would be taken symbolic for the sector and will determine the direction of the stocks in the sector. The mid caps rally was not much hampered inspite of the large cap correction today.
Cairn India listed below its issue price today. I don’t see anything wrong with the company’s fundamentals. I rather feel that it’s a good buy if one can hold the stock for a longer term. The company’s output is expected to grow five fold by 2010. Fund managers and institutional investors accumulated the stock at lower levels citing value in the stock for long-term investment.
For the markets as a whole, I don’t see any interruption of the broader bullish trend until Feb 15- Feb 20.
- Rajeev Nainani, Relationship Manager, Anagram Stock Broking