The Nifty closed above the crucial resistance (5,520) on strong buying in Reliance Industries and also in power, metals and technology sectors. The trading volume in the Nifty March futures remained healthy as bears covered short positions when the index moved sharply above the resistance zone (5,480-5,520). The trading data suggest volume-based buying above the Point of Control (PoC= 5,505-5,510), the area of most traded price.
The most positive development in the Nifty market futures in the last couple of trading sessions has been the more time price opportunities (TPOs) below the PoC. The more TPOs above PoC indicate active sellers and the reverse suggest active buyers. The Initial balance (IB) range (5,455-5,500), the first two TPO time periods, saw a drop in volume and also price opportunities, but the market rallied above the IB range indicating buying range extension.
The trade summary matrix (TSM) data indicates change of hands, but strong buying in IB range as well as value area (5,470-5,530). The value area also saw significantly higher volume and TPOs (over 70 per cent each) indicating price-based buying in that range. The market picture chart source from Bloomberg show 90 per cent volume above the previous day value area (5,485) and therefore this is the first strongest signal of an initiative buying.
The Nifty March futures closed at a 24-points premium to spot and shed almost 2 million shares in open interest over intra-day build-up. The futures closed significantly above resistance level at 5,555. The rally in the Nifty futures from the upper band of IB range was complemented by 68 per cent of the day’s volume and 55 per cent TPOs. This should take the Nifty futures around 5,623-5,667, the market picture chart suggests. The spot Nifty is likely to see volume-based upside around 5,623.
The Bank Nifty is expected to move up with a volume-based upside at 11,025 and support at 10,712. State Bank of India may rally around 2,647 and ICICI Bank around 1,040. Among other stock futures, as expected, Reliance Industries closed above 1,015 on short-covering and fresh long build-up. We had indicated a fresh upside in RIL in this column on Sunday. The stock is expected to move around 1,044, the volume picture chart suggests.
The options data points out fresh build-up in 5,800-5,900-strike call options and unwinding of short positions in 5,600-5,700-strike call options. The participants sold 5,400-5,600-strike put options on expectation of a fresh upside from the current level.