The April series expired in a Doji pattern, which indicates that the derivatives participants are waiting for a clear signal from the world markets in the wake of downgrading of Greece and Portugal.
The May futures closed at a discount to the spot and saw three-months-high rollovers, indicating short build-up by derivatives participants. The build-up of open interest in the 5,200-strike put and the 5,300-call options of the Nifty May series suggests narrow band movement in the coming week.
The cautious approach of the derivatives participants is also seen from the movement in key stocks futures during the last one month. The May futures of Reliance Industries fell 5.7 per cent during the period on 25 per cent higher rollovers, indicating build-up of short positions. The bears seem to have built positions in Infosys Technologies, TCS and Wipro as May futures saw strong build-up in open interest as well as a five per cent decline in futures prices.
However, HDFC, HDFC Bank, ICICI Bank and State Bank of India (SBI) have outperformed the market by gaining 5-10 per cent. SBI rose on short-covering while HDFC and ICICI Bank rose on account of long build-up. SBI today closed above value areas on strong buy volumes. The time-price opportunity chart indicates its May futures can move up around Rs 2,290 from the current close of Rs 2,271.
The trading pattern in Nifty call and put options of the May series suggests strong support at 5,200. The intra-day trading pattern sourced from Bloomberg indicated the derivatives participant were buying the 5,100-strike put options as they expected a fresh sell-off if the Nifty loses support at 5,180. Also, participants were not willing to write 5,300- and 5,400-strike puts as they expect that the Nifty has limited scope to move up from the current levels.