The Nifty moved in a narrow band and closed on a positive note after getting strong support at 5,030 and facing strong resistance above 5,100.
The index is expected to revisit 5,100 tomorrow. And, if it manages to cross 5,105-5,118, can test its recent high of 5,212. Global cues indicate positive opening tomorrow as European markets were in the green while Dow Jones opened strongly. The technical downside support remains around 4,962 while derivatives data indicate the Nifty may not go below 5,000 in the near future.
Nifty May futures closed at a marginal discount to the spot at the closing level. It was trading at a premium in afternoon trades. In the end, the May futures shed 870,550 shares in open interest, mostly through buy trades, indicating unwinding of short positions. Foreign institutional investors were expected to have covered short positions in Nifty futures as intra-day trading volume suggested buy trades by big traders.
Bloomberg data suggest strong accumulation above 5,060 with 61 per cent volume changing hands. The Nifty is expected to revisit 5,100, according to the time-price opportunity (TPO) charts.
There was aignificant short-covering and long build-up in 5,000 and 5,100 call options, which suggests a strong rally. The 5,200-strike call added 44,900 shares in open interest despite a trading volume of 11.50 million shares, indicating short-covering and fresh buy trades. There was profit-booking in the 5,000-strike put and fresh short build-up in the 5,100-strike put. The unwinding of positions at and above the 5,200-strike put indicates a near-term positive outlook.
The two-days rally in Larsen & Toubro (L&T) is expected to end, according to the market picture chart using derivatives data. The May futures of L&T faced strong resistance above 1,670 (15 per cent volume) and therefore it fell off the day’s high of Rs 1,680 to close at 1,656. The TPO data suggest resistance above 1,685, with volume-based support around 1,595.