The significant build-up of open interest at the 5,300 strike put despite only three days left for expiry of the April series indicate that the Nifty may not fall below the 5,300 level going ahead. However, the index may face strong resistance above the 5,400 as this strike call options has maximum open interest among call options. However, if one goes by poor trading volume in the Nifty April futures above the 5,350 levels, the index may expire around the 5,350 levels.
The April futures today moved within a small price range with strong support below the 5,315 levels and resistance above the 5,335 levels. The intra-day trading volumes sourced from Bloomberg suggest short covering from retail investors and profit booking from big traders around the value areas (5,315-5,335). The price projection using time-price opportunity (TPO) and volumes suggest upper hand for bulls only if the Nifty closes above the 5,345 levels.
The 5,200 put holds maximum OI among puts indicating strong support in case of significant correction from the current levels. However, the build-up of open interest at the 5,300 put options during the last couple of trading session through sell-side trades suggest the Nifty may not fall below the 5,300 levels going ahead. No wonder, the participants are booking profit in the April futures (OI down by 2.47 million shares) and slow on rolling over positions (May series OI up 1.46 million shares).
Among stocks futures, Maruti Suzuki witnessed profit booking from big traders and some short covering from retailers. The April futures of Maruti closed below the lower band of value areas (1,336-1,360) on profit booking. The May futures closed at a discount to spot and added 631,400 shares in open interest indicating short build-up. The price projection using TPO indicate support around Rs 1,304.
Sterlite Industries saw strong buy orders from big players above the 838 levels.
The April futures closed above the upper band of value areas (810-838) with 51 per cent volumes traded above the 838 levels. The undercurrent remains strong with May futures saw build-up of 1.12 million shares in open interest compared to unwinding of 0.77 million shares in April futures. The price projection using TPOs indicate upside of Rs 854 with strong resistance above the 885 levels.