Nifty seen moving to 4700 soon

The Nifty has consolidated in a range of 4460 and 4550 in the last three days and fresh long positions have been created in index futures. The index could thus see a sharp upswing on Monday and close above 4600. The NSE data shows that foreign institutional investors (FIIs) net bought index futures on 8th August 2008. But there was no corresponding rise in the open interest. Thursday was an exception, as over 50 per cent of the day’s index futures purchases were carried forward as open interest, indicating the build-up of long positions.

The FII derivative positions for on Friday are not known. But the Nifty’s recovery from the day’s low of 4464 indicates that FIIs covered their shorts at lower levels and increased long positions. The Nifty August futures added open interest of 14,437 contracts out of the total trading volumes of 650,665 contracts and the premium doubled from nine points to 18 points, indicating build-up in long positions.