The Nifty held the 5,300 level throughout the day and closed above the resistance level of 5,330 on positive global cues. Futures & Options (F&O) traders, however, were apparently not convinced about the positive news flow, as trading volume in that particular segment declined over 10 per cent on account of the firm-footed Nifty.
The traders are now expected to renew their interest in F&O only if the Nifty moves convincingly above 5,370 with strong downside support at 5,270. The trading volume in the Nifty July futures enjoys strong support from top traders, as they covered short positions above 5,315. The July futures closed above 5,330 with 40 per cent of the trades changing hands between 5,330 and 5,345, indicating strong volume at higher levels. However, time-price action was restricted to the 5,300-5,315 level, which indicates that price-sensitive traders were inactive at higher levels.
The short-term indicators are neutral, while medium-term indicators show bullish structures, according to technical analysts at Edelweiss Research. The market now seems to have reached its expected halt and is ready to resume its uptrend with a potential upside of 5,475. A price projection on the basis of the time-price opportunity (TPO) data in a two-hour timeframe arrives at 5,350. However, a volume-based projection indicates the Nifty may visit the 5,407-level in the near future.
The trading in call and put options indicates the Nifty may face strong resistance above 5,400 with support around 5,300. The 5,300-strike call saw short-covering from top traders, while the same traders were writing the 5,300-strike put. Top traders also bought the 5,400-strike call and initiated some buying and short-covering in 5,500-strike call options. This means options traders expect the Nifty to cross 5,400, with an upside target somewhere around 5,500.
Among stock futures, Reliance Industries is expected to move above Rs 1,100 according to price projections on the basis of both TPO and volume data. The stock saw strong buy-side trades at higher levels with 40 per cent of the same being struck above Rs 1,091. Reliance Communications is expected to get support at Rs 194, while the upside is capped at around Rs 205. Larsen & Toubro is expected to revisit the Rs 1,800 level.