The Sensex and Nifty closed at new 52-week highs, led by banks, the Reliance Industries (RIL) scrip and a strong opening in European markets. The trading pattern in the Nifty futures & options and key stocks futures – including State Bank of India (SBI), ICICI Bank, RIL and Infosys Technologies – hints at a level of 5,800 for the Nifty this week.
The Point of Control (PoC), the price level where the market has spent the most time trading, indicates multiple distribution of time-price opportunities (TPOs) and volume. Over 70 per cent volume and TPO periods were above 5,700 levels and also above the first two TPOs of 30 minutes each. This clearly signals short-covering from bears.
The Nifty September futures closed at a premium to spot and added 1.67 per cent share in open interest (OI), mostly through buy-side trades in the value area (5,695-5,75). Participants booked profits above 5,755, according to Bloomberg data. However, the undercurrent remains strong as the Nifty closed marginally below the day’s high, despite 30 per cent of the volume – mostly sell-side trades – changing hands above 5,755.
The trading pattern in call options hints at the 5,800 level for the Nifty, going ahead, as options traders covered short positions in the 5,600- and 5,700-strike call and built up fresh long positions in the 5,800-strike call. The support for the Nifty is expected to move up further to 5,700 as this strike put added 3.9 million shares in OI, mostly through sell-side trades. The OI in the 5,800-strike put rose by a whopping 2,300 per cent. This also depicts a buoyant outlook for the Nifty.
Among stocks futures, SBI (up 5.83 per cent) and ICICI Bank (up 5.04 per cent) were the most preferred stocks in the derivative segment. HDFC, RIL and Infosys Technologies also attracted significant buying interest.
The September futures of SBI closed at Rs 3,120, adding 412,375 shares in OI. The TPO data indicates that SBI is poised to move up further to around Rs 3,175, while a volume-based drive may take the bank’s scrip to around Rs 3,275. ICICI Bank, which closed at Rs 1,094, is projected to cross Rs 1,115 level in the near future.