The six-day rally ran out of steam as participants preferred to book profits ahead of the expiry of the June series on Thursday (June 24). Tuesday’s reversal appears to be a small correction as strong support for the Nifty remains around the 5,300 mark. Technically, the market has recovered almost 100 per cent of its recent correction and, hence, both the Nifty and Sensex face strong resistance around the 5,400/18,000 levels.
But the Nifty continues to enjoy strong support around the 5,200 level. In fact, technical support for the Nifty is at 5,273. So, the index may not go substantially below 5,300.
The Nifty June futures witnessed profit-booking at higher levels. In open interest (OI), June futures showed an unwinding of 1.46 million shares. This indicates participants have not initiated rollovers into July futures. However, Nifty July futures has added 6.20 million shares in OI and closed at a premium of 10 points to spot, indicating creation of long positions.
According to Bloomberg data, 38 per cent volume changed hands in the July series above the 5,345 mark, mostly through buy-side trades. Price projections using time-price opportunity (TPO) charts indicate the Nifty could revisit 5,370 in July series. The 5,200-strike call witnessed profit-booking, while the 5,300-strike call added 367,450 shares in OI, mostly through change of hands, indicating a short build-up. Participants added 271,850 shares in OI in the 5,300-strike put on expectation of the expiry of June series around 5,300. The participants have built up an OI in 5,300-5,500 strike calls and the 5,200-5,300 strike puts of the July series on expectation of a range-bound trading in July series. The OI build-up in July series calls and puts indicate resistance at the 5,400 level and support at the 5,200 level.
Among stocks futures, ITC is expected to move around Rs 307 on strong volumes, and may go above Rs 303. The intraday trading data and OI build-up in BPCL and IOC indicate fresh upsides, too. BPCL is expected to move to around Rs 569 from the current close of Rs 551, while IOC may move up to around Rs 360 from Rs 350.\