The Nifty moved between immediate support at 5,850 and resistance at 5,970 and closed on a bullish note on short-covering in banking stocks and index futures. The bull run will get a clear push if the Nifty closes above 6,020. Till then, the market is expected to stay within 5,850-5,970. The bigger push or trade beyond 6,020-6,060 largely depends on the new derivatives participants that have entered the market in the last two weeks.
The December futures has not built fresh open interest in the past five trading sessions despite moderate to heavy trading volumes. The unwinding in the 5,600-5,900-strike call options and change of hands in the 6,000-6,100-strike call options are hinting at a major upside. The open interest in the 5,800-5,700-strike put options clearly indicates that the market has very limited weakness from the current level.
The data in Nifty December futures outline change of hands and short-covering by big buyers, the trade summary matrix (TSM) suggests. The liquidity providers covered short positions around the initial balance range (5,880-5,915) and the value area (5,875-5,940) saw changed of hands. There was significant short-covering below 5,900 and profit-booking above 5,940. In the end, the December futures settled at 5,966 and shed two million shares in open interest on an intra-day basis.
Call option participants covered short positions across all strike prices, prominently in the 6,000-6,100-strike call, on expectation of a fresh rally ahead. There were significant additions to open interest in the 5,900-6,000-strike put options, which is hinting that the support for the index may move up gradually from 5,900 to 6,000. Nevertheless, major support for the Nifty continues at 5,800 and resistance above 6,000, the open interest in these options suggests.
Among stock futures, Tata Motors (TTML) moved between our mentioned support and resistance and closed at Rs 1,342. The stock witnessed profit-booking above this level and so the time-price opportunities data indicate a narrow-band movement going ahead. TTML may move up around Rs 1,737 with lower-end support at Rs 1,268.