After testing the lower end support of 5,700, the Nifty futures recovered sharply to close at 5,868 on short-covering.
The intra-day pullback should be enough to limit the weakness seen in the last seven trading sessions and bring the focus back to 6,000, the market picture chart suggests. Nevertheless, the current rally may face strong time-price opportunities (TPO)-based resistance at 5,935, while the volume-based supply is expected around 5,957, indicates the market picture chart (using the data of the last two trading sessions. The value area saw change of hands, with 70 per cent volume in the TPO periods hinting at short-covering by positional traders.
The close above 5,800 is considered a major victory for the bulls to take back the Nifty to around 6,000. The futures also closed above the initial balance range (5,788-5,820) and above the upper band of the value area (5,734-5,830). This signals the current pullback may sustain for the next few trading sessions.
However, the dramatic recovery in the index from 5,760 in the last two hours hints at a fresh upmove in January futures to around 6,030, the volume picture chart suggests. The MKTP chart hints at support at 5,595, based on TPOs. The spot Nifty is expected to move to 5,875-6,005, both TPO and volume picture charts suggest.
The Nifty options data show profit-booking in the 5,800-6,100-strike puts and short-covering in the 5,800-5,900-strike call options. The 6,000-strike call options saw change of hands,while the 6,100-strike call options saw short-covering. The OI build-up in the 5,600-5,800-strike puts suggests the range lends support, while OI in the 6,000-6,200-strike call options hints at resistance.