As expected, the November series expired at 5,800 after moving down around 5,780 on account of a volume-driven sell-off in the last 90-minute session. Going ahead, the build-up of open interest (OI) in the Nifty December futures in the last four trading sessions is hinting at a fresh sell-off and a loss of the most crucial technical support of 5,750 in the coming days.
The trading pattern in the Nifty futures shows a substantial weakness with liquidity suppliers remains net sellers in price range established during the first two TPO time periods. The value area where approximately 70 per cent trading volume and TPOs get executed is hinting at a change of hands. This means the market is not accepting a price range in the value area, which is in the control of short-term liquidity providers. The sell-side traders were seen above 5,900 while some short covering was seen below 5,850.
The intraday market picture chart (MKTP) for the December futures in the last 90-minute trading of the last four days is hinting at a volume-driven downside around 5,657 in the near future. The time-price opportunities (TPOs) data indicate that any upside in the Nifty is likely to be terminated around 6,088.
The weakness in the market was clearly seen in the short build-up in December futures when the Nifty was trading above the 5,900 mark. The new series carries OI of 25.92 million shares which is significantly higher compared to OI of 24.41 million shares in November futures on the expiry day. The December futures which closed at 48 points to premium to spot is expected to see a volume-based decline or be around 5,770 going ahead.
A significant addition of OI was seen in the 5,800-5,900 strike call options of the November series, which indicates that the participants are expecting a trade below 5,800 going ahead. The OI build-up at these calls is hinting at resistance for the Nifty. The participants seem to have bought 6,000 strike calls to protect erosion in the case of a bounce back. The put writing in 5,500 strike put options indicate support for the Nifty at that level.
