The Nifty maintained short-term support at 5,300 and faced stiff resistance above 5,335 as futures and options (F&O) participants preferred to trade in a narrow range before the expiry of the derivatives cycle. The index is expected to maintain support at 5,300 and bulls will have an upper hand only if the Nifty closes above 5,360 with higher volumes. Derivatives data suggest expiry for the Nifty around 5,350.
Nifty April futures closed on par with the spot and shed 4.81 million shares in open interest (OI), mostly through change of hands, indicating rollover of positions in the May series.
The next month’s series has added 5.1 million shares in open interest, mostly through buy trades, suggesting strong undercurrent. The buying in the 5,400-strike call options of the May series indicates that both benchmark indices are poised to revisit their recent highs.
The trading pattern in Nifty put and call options suggests narrow band movement for indices before the expiry of the derivatives cycle on April 29. This means participants expect the market to consolidate at current levels before moving up sharply.
However, considerably high volumes in the 5,400 call options of April series indicate that participants expect a strong rally before the derivates expiry.
Among stock futures, ONGC showed strength. Its April futures were up 2.6 per cent on short-covering. The May futures of ONGC closed at a premium to the spot and added 237,375 shares in open interest, mostly through buy-side trades, indicating rollover of long positions. The time-price opportunity chart from Bloomberg indicates upside of around Rs 1,073.
HDFC saw a quiet trading session with derivatives participants preferring to book profit at higher levels. The April futures closed at Rs 2,843 from the day’s high of Rs 2,870 and shed 33,000 shares in open interest on profit-booking The May futures closed at a premium and added 78,750 shares in open interest, suggesting long build-up.
The stock has the potential to rise to around Rs 1,073, according to the time-price opportunity data. ITC moved in a narrow band and saw consolidation around Rs 267-269. It faced strong resistance above Rs 272.
