Nifty seen in 2800-2950 range, put writing at 2800-2700

SOURCE:ECONOMICTIMES

Despite weak cues from the global markets, Indian stocks managed to trim most of their early losses in a choppy trade Wednesday. National
Stock Exchange's 50-share Nifty closed the day 0.20 per cent higher at 2776.15 while BSE Sensex slipped 0.22 per cent to close at 9015.18.

Intraday, Nifty touched a high of 2806.50 and low of 2736.65, a band of around 70 points. The Sensex moved in a narrow band of 191 points. It touched a high of 9113.92 and low of 8922.31.

Nifty February futures provisionally settled at a discount of 15 points to the spot. The contract price gained 0.28 per cent and open interest added 24.56 lakh shares. However, the cost of carry and higher sell quantity suggests modest build up of shorts in the contract.

Call buying was observed at 2800 strike while unwinding of longs was observed in 2900 level and moderate call writing was seen in 3000 and 3100 strikes indicating Nifty to stay below 2900-2950 levels in near term. On the other hand, huge put writing was seen from 2800 to 2600 levels indicating a strong support zone.

"The markets are likely to trade volatile in a narrow range. Given the options build up, I expect Nifty to remain in 2800-2920 zone before moving either side. At this point of time I will advise players to play safe forming straddle at 2800 levels. Oil marketing companies can be a good bet from short term point of time," said Narendra Joshi, analyst at Apex Wealth Management.

In stocks futures, Reliance Industries February jumped 1.83 per cent on short covering. State Bank of India contract fell 2.53 per cent while open interest added 3 lakh shares indicating short build up. ICICI Bank near month dropped 4.23 per cent and shed 7.73 lakh shares in open interest.

DLF futures soared 9.86 per cent as traders covered their short positions in the contract. Reliance Infra February futures skid 3.33 per cent and Reliance Petroleum February contract slipped 1 per cent and shed 4.47 lakh shares.