Nifty futures broke out of the 5,250-5,270 resistance and closed at 5,285 on short-covering by top traders and fresh long build-up. The Nifty expects to target 5,330 and move towards 5,400, may be in the new July series. The Sensex is expected to revisit 18,000 in the July series. The trading pattern suggests that bulls have complete command over volume, as Bloomberg data show that over 40 per cent volume has changed hands above value areas in the last couple of sessions.
Nifty June futures closed at a 10-point premium to the spot and shed one million shares in open interest, indicating short-covering, while July futures added around one million shares in open interest through buy trades, indicating long build-up. On the downside, the Nifty can correct around 5,200 if it fails to sustain above 5,270. The intra-day trading pattern shows short-covering in price-control areas (5,210-5,230) and strong volume (41 per cent) above 5,265, which suggest the Nifty may not slip below this level.
Trading in call options shows short-covering in 5,100-5,300-strike calls and fresh long build-up in the 5,400-strike call. This means there is strong possibility of the Nifty moving above 5,300 and targeting the 5,400-level. Put writers booked profit in 5,000-5,100-strike puts and built short positions of over 1.22 million shares each in 5,200- and 5,300-strike puts. The 5,200-strike put holds the maximum open interest among put options, indicating strong support.
Among stock futures, Larsen & Toubro achieved the time-price opportunity (TPO) target of Rs 1,770 mentioned in this column on June 16.
L&T futures closed at 1,780 on short-covering. July futures saw rollover of 252,500 shares at a premium to the June futures, indicating long build-up.
The price projection using volume indicates that L&T could move above 1,800 with an upside target of 1,850. Reliance Industries, which closed above its resistance level of 1,050, is expected to revisit the Rs 1,100 mark, TPO data suggest.
ITC gained over a per cent on strong volume above Rs 294.50. The June futures of ITC saw short-covering of over one million shares while the July futures added 1.13 million shares, mostly through buy trades. TPO data suggest a fresh rally around Rs 300.