"Markets were choppy at the beginning, and traded positive for most part of the day, on short covering and roll over to july series. High crude oil prices and the Ongc results declared after the close of hours on 25.06.2007, lead to the rally in its price which made Nifty to touch 4296.15 in the closing hours. Though both the indices finally closed positive, it is quite evident that index funds are concentrating on Nifty in view of the roll over and impending expiry of june series tomorrow, were supporting it. Ongc though a heavy weight, can influence Nifty more than Sensex, as Nifty is based on market capitalisation where as Sensex is calculated on free float basis. Sensex though surpassing May closing on intra day basis, is unable to close above the level ( 14544.46) for the past few days.
US markets have opened and traded positve for some time and on profit booking ended negatively, on concerns relating to their economy..Subprime lending issues, FOMC meeting on thursday etc., Our markets will be volatile today since large open interest positions are to be rolled over to next series, as today being the penultimate day for expiry of june series. Study of Derivatives data indicates that June series might settle between 4200 and 4300 tomorrow, probably lower than May series which settled at 4295.80.
Strategy for the day: If the markets open positive, one can buy a straddle of 4300 of current series and hold till expiry; In this strategy one will loose the premium paid if markets settle around 4300; whereas if there is wide swing on either side, one will make un lilmited profit.
The day's range for Nifty shall be 4200 (Support) and 4320 (Resistance); Sensex shall be 14200 (Support) and 14600 (Resistance)
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