The Nifty closed in a Doji pattern amid a dull trading session on Tuesday, as derivatives participants don’t expect enough steam for extended gains into 6,060. The Nifty December futures saw poor volumes while rollovers in the January futures were significantly lower, despite the fact that only a few trading sessions are left for the expiry of this month’s series. The bulls are holding their positions to get fresh meat before expiry, while the bears are waiting to go short if the Nifty rises significantly. Overall, a lacklustre trading session is on the cards tomorrow, unless the Nifty breaks below 5,970.
For the next few days, the Nifty is expected to move in a tight range with support at 5,970 and resistance above 6,030. Any breakout below or above the range is likely to take place after the expiry of the current series. The global cues are steady and there are good signs of accelerated offshore supplies into the Indian market. Good corporate Q3 results will be an icing on the cake. Given these positive cues, there is nothing significant to get bearish at this stage, says J Moses Harding, head, global markets group, IndusInd Bank.
The trade summary matrix data indicate sell-side trades above 6,028. Given that the December series shed 1.37 million shares in open interest, the bulls booked profit. The value area (6,060-6,018) saw selling at higher levels and some short-covering at lower levels. The initial balance range (6,002-6018.50), the first two time-price opportunities (TPOs) established by day traders, saw 90 per cent trading volume, mostly through change of hands. The market picture chart shows 100 per cent trades below the lower band of Monday’s initial balance range (6,028).
The triple distributions of point-of-control and the price level the market has spent trading in the range of 6,010-6,016 indicate the players expect the Nifty to face strong resistance above 6,016 tomorrow. The market picture chart is hinting at higher-level resistance and strong support at 5,970. Intraday TPOs project a level of 6,030 while volume-based support may come at 5,980. The spot Nifty is expected to face resistance above 6,011 while support is seen at 5,980.
The Nifty January futures continues to command a hefty premium over December, indicating long rollovers. The January series has an open interest of 9.74 million, lower by 5.5 million shares compared with rollovers in the December futures two days before the expiry of the series. It means the bulls are rolling over their positions into the next month series, while the bears are wary of going short at the current level.