The Nifty staged a smart after Budget rally to close above 5,555 on upbeat sentiment and significant short-covering in Reliance Industries, ICICI Bank and Larsen & Toubro. The options traders covered all short positions in the 5,400-call options and build-up fresh short positions in the same strike put options. The Nifty March futures closed at a premium to spot and saw short-covering during the intraday session. The Nifty is likely to face the first hurdle at 5,580 and around 5,617 thereafter. The open interest (OI) build-up in the 5,400-put options suggests support while the build-up at 5,600-call options hints at resistance.
The trade-summary matrix data indicate selling pressure at 5,400-5,430 and considerable short-covering when the Nifty surged above 5,460. The initial balance range (5,375-5,425) established by floor traders saw 20 per cent volume and 24 per cent time-price opportunities (TPOs), which hints at price-based short-covering at those index levels. The value area (5,415-5,515) saw change of hands and 55 per cent volume as well as TPOs, and hence the Nifty is expected to get strong support at those levels. The market picture chart hints at a strong resistance above 5,552 and volume-based selling pressure around 5,580. The MKTP data hints at volume-based surge for March futures around 5,637.
The OI build-up in the 5,700 and 5,800-call options hints at a significant upside if the index closes above 5,637. Also, the participants have build-up short positions in the 5,300-5,500-strike put options on expectation of fresh after Budget rally in the near future.
The Bank Nifty closed near the day’s high on account of short-covering in HDFC Bank, ICICI Bank and State Bank of India. The Bank Nifty expected is to move up around 11,110, while TPO-based support is seen around 10,507.