The Nifty fell below 5,500 on profit-booking and weak global cues. However, it recovered to close at 5,505 on short-covering. The August futures still hold significantly high open interest compared to the same time last month, indicating profit-booking that may guide the index below 5,500. At the same time, Nifty September futures added significant open interest, mostly through buy trades, indicating rollover of long positions.
The intra-day trading volume and movement in Nifty futures indicate the index may slip below 5,500 tomorrow. The time-price opportunity (TPO) and volume data for 30 minutes each indicate the index has strong support around 5,500 and resistance above 5,540. The September futures may slip below 5,500 tomorrow on weak overseas cues, but may get strong support around 5,475, the TPO data indicate. The volume-based resistance is likely to be around 5,553.
In Nifty, call options below 5,500 and put options above 5,400 saw profit-booking. The open interest in the 5,500-strike call remains stationary despite a trading volume of 20.55 million shares, suggesting change of hands. The 5,500-strike put shed 1.13 million shares in open interest, mostly through sell trades, indicating profit-booking. The trading in the 5,500-strike puts and calls indicates the index may not go below 5,500 significantly before the expiry of the August series.
Among stock futures, Bharti Airtel, Ranbaxy and State Bank of India (SBI) are expected to rise. Bharti’s September futures settled at Rs 323.80 and added 3.19 million shares with strong buying above Rs 322. In contrast, unwinding in August series was 1.64 million shares as participant expected a fresh upside in Bharti. The September futures of SBI saw strong support around Rs 2,800 and closed at Rs 2,836. The TPO data indicate that SBI has the potential to rise around Rs 2,865-2,875.
Ranbaxy shot up after noon from a low of Rs 475 and closed at Rs 496. Its September futures saw more than two-third volumes after opening at 1.30 pm on news of payment of a one-time penalty. This sharp upswing in volume can take Ranbaxy above 514, the TPO data suggest.