The Nifty opened on a positive note and remained range-bound in the absence of traders in the derivatives segment. The volumes on the F&O segment of the National Stock Exchange declined by over Rs 6,000 crore, indicating that speculators are now waiting for direction from the new US administration.
In the last hour of trade, the Nifty tested resistance at 2,878. It closed the day at 2,846 with a gain of 18 points on profit-booking at higher levels. The Nifty is expected to cross the 2,878 level and then target 2950, a technical analyst at Ambit Capital said.
Nifty’s January futures were trading in the range of 17-21 points discount to spot throughout the session and closed the day at 2,833, a 13-point discount to spot. The OI in January futures declined 469,650 shares due to unwinding of long positions at higher levels. The Nifty February futures closed at 2,836 and added OI of 1.43 million shares indicating rollover of long positions.
Options traders were seen unwinding their short positions in 2,800 and 2,900 calls as they expect the Nifty to trade above 2,900. This is because technical indicators were showing buy signals.
The call buying was seen at 3,000 strike largely due to hedge short positions in 2,800 and 2,900 calls. The put options data suggest that the index has strong support around 2,800 and resistance around 3,000.
Reliance Industries witnessed profit-booking at higher levels as data from Bloomberg showed that almost 20 per cent of the trades in January futures took place at an average price of Rs 1,233. The January futures added OI of 204,300 shares at close, which were lower from intra-day positions of 359,400 shares.
The 1,230 strike call of RIL added OI of 95,625 shares at an average premium of Rs 50 per shares indicating that the stock can go up to Rs 1,280 level.