The Nifty maintained the 5,260 support on Friday as all price activity was within a narrow range of 20 points. The Nifty April futures closed at a premium to the spot on a considerable high volume above the 5,275 level, indicating that we may not see a sharp correction as long as the Nifty held the 5,260 support level. The time price opportunity (TPO) chart suggests support around the 5,237 level.
The participants so far have not unwound their holdings below the 5,260 level. The April futures saw 3.3 per cent shares changing hands below 5,250, indicating strong support below this level. According to analysts at Edelweiss Research, the uptrend is yet not breached, but the short-term price correction is likely to take the Nifty closer to 5,230.
The participants were booking profit in 5,300 and 5,400 stike calls, while some short position build-up was seen at the 5,200 call option. This means the Nifty may slip below the 5,200 level in the near future. Unwinding was visible in 5,300 and 5,400 put options, which suggests selling pressure if it starts trading above the 5,300 level.
Interestingly, 5,000 and 4,900 put options witnessed build-up in open interest, indicating long hedging by participants. Nevertheless, the 5,200 put has highest contracts and the level is a strong support for the market.
Among stocks futures, ITC gained 2.4 per cent on strong buy-side volume above Rs 268.50. The TPO chart suggests fresh upside for ITC around Rs 274. Tata Steel gained 1.30 per cent on strong volume above the Rs 685. The stock has potential to go above Rs 700 in the near future, the TPO chart suggests.