The Nifty faced resistance above 5,400 and closed near the opening level, which indicates that bulls are losing their grip. The intraday Doji pattern also shows that participants sold their positions after the Nifty moved above 5,400 and covered the same at 5,360-5,385.
The intraday trading volume in the Nifty futures and options signifies a range-bound market, with support remaining at 5,360 and resistance above 5,420. However, a close above 5,430 would pave the way for a further upside, but the 5,453 level remains a strong hurdle.
The Nifty July futures closed at a premium to spot and shed 118,550 shares in open interest (OI), mostly through sell-side trades, according to Bloomberg data.
The intraday trading pattern in the Nifty futures showed profit-booking above 5,400 and some short-covering as well around 5,385.
The Nifty August futures closed at a five-point premium over the July series and added 458,500 shares in OI through buy-side trades. According to Bloomberg, top traders indulged in the August futures near the value areas of 5,385-5,404.
Though only six trading days remain for the expiry of the current series, participants are adding fresh OI in the 5,500-strike call of the July series. In addition, the 5,400-strike call holds an OI of 9.14 million shares, mostly through sell-side trades, compared to the OI of 12.25 million shares in the 5,500-strike call options, mostly through buy-side trades. This is clearly being done to protect short positions at 5,400, in case the Nifty breaks the resistance level of 5,453 and rises above 5,500.
The put options data shows a build-up of 914,400 shares in OI in the 5,400-strike put, mostly through sell-side trades. The 5,300-strike put shed 613,550 shares in OI through buy-side trades. This means traders have covered short positions in the 5,300-strike put, which is available at a nominal premium, and are writing the 5,400-strike put on expectations that the July series will expire at 5,400.
Among stocks futures, Crompton Greaves and Tata Steel rose more than four per cent on short-covering, while Balrampur Chini and Shree Renuka Sugar fell more than three per cent on profit-booking and short rollovers. Time-price opportunity (TPO) data projects a price target of Rs 302 for Crompton Greaves from its closing level of Rs 282. Renuka Sugar, which closed at Rs 63.75, is expected to move down further to around Rs 60, according to TPO data.