The Nifty faced strong resistance around 5,400 on profit-booking at higher levels. The futures and options (F&O) data indicated that traders booked profit in index futures and frontline banks and technology stocks. However, the trading pattern in index futures and options suggests the market has completed the short-term correction on an intra-day basis and benchmark indices are now poised to cross higher levels. The Sensex and the Nifty are expected to trade convincingly above 18,000 and 5,400, respectively, this week.
The market today saw normal distribution and very poor volume below 5,355 in Nifty April futures, which indicates the index may not go below this level in the near future. Nifty April futures traded at a premium to the spot and added 228,550 shares in open interest, mostly through buy trades in the value area between 5,355 and 5,385. Traders booked profit above 5,385, but trading volume was convincingly low, around 13 per cent. The price projection using the time-price opportunity (TPO) chart indicates the Nifty may move around 5,418.
The trading in Nifty options indicates short-covering in the 5,300-strike call and some long build-up in 5,400 call options. There was change of hands in 5,500 calls, mostly through buy trades. This means participants expect the index to move above 5,400. The support for the Nifty is expected to be above 5,300, as this strike put added 1.07 million shares in open interest through sell trades. The 5,400 put added considerable open interest, indicating strong undercurrent.
Among stock futures, Reliance Industries, ITC, Gail, Bharti Airtel and Grasim saw strong buy trades above the value area. Grasim gained more than 2.6 per cent on 50 per cent-plus volume above Rs 2,889. The TPO chart indicates that April futures of Grasim are poised to move around Rs 2,990 from today’s close of Rs 2,905. Gail rose 3.4 per cent on strong buy volumes above Rs 431. The April futures of Gail is expected to move around Rs 450, according to the TPO projection.