The Nifty June and July futures saw sustained support at the 5,300 level and closed above 5,335 on short-covering and positive global cues. The open interest (OI) position in calls and puts suggests the 50-share index may not slip below 5,300 on Thursday — the last day of the June series. However, in case of an intra-day dip, the Nifty may get strong support at 5,274 level, but may still face resistance above 5,370.
The Nifty June futures shed 3.73 million shares in OI, while the July futures added 7.20 million shares. This means some traders are still holding short positions on expectations of a correction on expiry day. The trading pattern in the Nifty futures in the last couple of sessions suggests strong volume-based support at 5,330 and, hence, the index may not go below that level during Thursday’s trade.
The OI in July futures has been higher at 22.09 million shares, compared to 20.2 million shares in June series — a day before the May series expiry. Also, the rollovers in June series were at a discount, compared to the six-point premium to the July series. This indicates long rollovers from the futures and options (F&O) participants, and that can take the Nifty above 5,400 in the July series.
The participants have built up an OI in 5,300-5,500 strike calls, mostly through buy-side trades on expectation of a fresh technical rally after the expiry of the June series. The 5,400 and 5,500 calls together added 1.85 million shares from the top trades, according to Bloomberg data. Traders were writing down the 5,300 and 5,400-strike puts of July series, indicating long-term support for the Nifty.
Among stocks futures, Hindustan Unilever, Infosys Technologies and Maruti Suzuki saw long rollovers in the July series. Top traders were seen buying Infosys at higher levels with 77 per cent of the volume in July series changing hands above the Rs 2,780 level. The time-price opportunity (TPO) chart suggests a price level of Rs 2,820 in the near future.
Among others, Hindustan Unilever is expected to move to Rs 267 from Rs 260 and Maruti Suzuki to move up to Rs 1.430-1,440 from the current close of Rs 1,411, based on price projections using TPOs and volume.