The Nifty consolidated around 6,000 for the fourth consecutive session in the absence of clarity among both bulls and bears. A Doji pattern, the fourth in a row, and absence of any significant build-up in open interest in index and stocks futures, indicate that the sideways trading approach will continue for a few more sessions. Nifty futures, which shed one million shares in open interest, is likely to trade in a narrow band, with lower-end support at 5,960 and resistance around 6,060. The support for the spot Nifty would be around 5,930 and resistance above 6,030.
The trade summery matrix (TSM) for the day’s session suggests sell trades in the value area (5,970-6005) and the initial balance range (5,975-6,015) established by liquidity providers during the first two TPO (time-price opportunities) time periods. Top traders were sellers during the morning session and covered short positings when the index regained the 6,000 level.
Mid-sized traders changed hands while retail traders booked profit at the higher level. The volume and TPOs in the value area and the initial balance range were considerably high, over 70 per cent, which indicate acceptance of the price range by the market players.
The market picture chart for the entire trading session is hinting at a TPO-based upside of 6,022.50. The volume-driven surge is expected to end around 6,032.50, the market picture chart sourced from Bloomberg suggests. The smart recovery in the last 75 minutes with 28 per cent volume and 16 per cent TPO time periods may take the index around 6,050, the volume picture chart from Bloomberg suggests. The TPO-based support on account of profit-booking at the higher level is expected to be around 5,960 for index futures and 5,930 for the spot Nifty.
The trading volume in Nifty call options is hinting at profit-booking in the 5,900-strike calls and fresh build-up of open interest in the 6,000-6,300-strike calls. The TSM chart indicates buy trades in the 6,100-6,200 call options and sell trades in the 6,000 call options. The participants built fresh short positions in 6,000 and unwound short positions in the 6,100-strike put options on expectation of sideways trading in the near future.
The market is struck between weak global cues and improved sentiment in the domestic money market. Nevertheless, this is not considered good enough to generate momentum for the bull rally, says J Moses Harding, head, global markets group, IndusInd Bank. Foreign institutional investors have been net sellers in index futures, mostly in Bank Nifty futures, which indicates that bank stocks are likely trade sideways for some more time.