The Nifty futures failed to gain momentum after the gap-up opening on profit-booking at higher levels. The futures settled at 6,211, up 28 points over yesterday’s close. The selling pressure, seen from the day’s high of 6,243, is expected to continue tomorrow with time-price opportunities (TPO)-based support seen around 6,180. The Nifty October futures, however, continues to trade at 25-30 points premium to the spot, hinting at the dominance of bulls.
The Nifty has been trading in the 6,150-6,250 band for the last four trading sessions due to selling at higher levels from liquidity providers and short-covering by bears at lower levels. The price action in the initial balance range of 6,210-6,243 saw 75 per cent volume and profit-booking from top traders (open interest in the Nifty futures down by 1.02 million shares). So, the market was unable to move up due to selling pressure in the first two TPO periods (IB range) established by the liquidity providers.
The market picture shows multiple distribution of point-of-control in the value area (6,200-6,224), which indicates bulls’ dominance in setting price for bears to cover short positions. This control by bulls in the value area is expected to take the Nifty to the TPO-based target of 6,241. The futures closed in the value area with strong 72 per cent volume. A close within the value area suggests the market acceptsthe value area. So, strong volume in this area is expected to push the Nifty futures around 6,265 in the near future.
Options traders see limited scope for the market to fall below 6,100 as the 6,100-strike calls saw poor volumes and unwinding of short positions. The 6,200-strike calls saw unwinding of long positions, which hints at resistance for the Nifty above this level. The participants built short positions in the 6,300-6,500-strike calls as they expected resistance at higher levels.
Among stock futures, the October futures of Reliance Industries (RIL) moved up and faced resistance at Rs 1,055.
The intra-day trading data indicate 76 per cent volume and 52 per cent TPOs above the previous day’s high of Rs 1,040. Also, over 52 trades were done above the mid-point value of Rs 1,046. So, strong volume above mid-point is expected to drive RIL’s share price around Rs 1,065 in the near future.