The Nifty September futures achieved all the targets that we had predicted in this column, yesterday. The Nifty opened on a strong note at 5,095, on account of significant recovery in global markets and moved up sharply to cross the 5,100 mark thereafter, on account of fresh buying by floor traders in the first two time-price opportunity (TPO) time periods. The volume based recovery from the day’s low of 5,078,lifted the index to our upside target of 5,150, before closing lower at 5,020, on profit booking.
The market is expected to move in a narrow range tomorrow, as the September futures saw significant profit booking above 5,130, and strong support of 5,105. The buyers and sellers were at equilibrium at the point of control (PoC-5,114) with 45 per cent TPO counts above and below PoC level. The volume in the initial balance (IB) range of 5,078-5,105 remained subdued around 34 per cent, mostly through buy-side trade. The value area (5,090-5,130) saw significant short covering around 5,090-5,118.
The recovery above 5,130 was accompanied by 20 per cent volume and TPOs, which indicate change of hands from old players to new ones. The September futures settled at a discount to spot and, despite 19.18 million shares, it failed to add any fresh open interest position in the end. This clearly means the entry on new players in the market. The market picture (MKTP) chart projected a time-price opportunity (TPO) -based level of 5,147.50, which is close to the day’s high of 5,149. The volume-based upside could get derailed around 5,161.
There was no significant selling pressure in the morning session from floor traders, but profit booking was seen in the afternoon session, when the September futures started convincingly above the 5,130 mark. The Nifty is now faced with too many hurdles to achieve the 5,300 mark. The crossover of 5,150 with strong volume would take it to around 5,247 and 5,305 thereafter, based on the current surge from the low of 4,930 to high of 5,149. The strong support for the September futures is expected to come around 5,080.
Index heavyweight Reliance Industries moved up strongly, after getting support at 823. The trading pattern pointed at narrow band movement with resistance above 854. Options traders build-up long positions in 5,100-5,200-strike call options, as traders expected strong up-move in the market. The 5,100-strike put added 767,150 shares in open interest, mostly through change of hands, indicating a short build-up by new players.