The Nifty October futures settled at the day’s high on the back of a strong opening in the European markets. The market profile suggested a trend day or dominance of other time frame traders, which accounted for 86 per cent of the trading volume of the day. The floor traders covered short positions as the October futures moved up sharply after consolidating around 4,890-4,936 to close at the day’s high of 5,000. However, on account of a big, fast move, the market is said to be advertising for the opposite activity, responsive activity. So if responsive selling becomes dominant tomorrow, the trend will probably be halted.
The 101-point rally in the October futures has not been accompanied by strong volume, indicating a lack of interest in taking a positional call on a trend day. The aggregate volume in the futures declined to 18.85 million shares from 21.80 million shares on Friday and 23.80 million shares on Wednesday. The volume was significantly higher at 27.70 million shares on October 4. However, the drop in volume and more or less unchanged open interest positions (OI) after a significant recovery from the recent low of 4,725 on October 4, indicate strategic buying from the new set of F&O players who expect strong rally, going ahead.
The market undercurrent changed dramatically after the strong rally in the world markets last week. The Nifty October futures also revisited the 5,000 mark after a gap of seven days. The bull’s dominance is expected to continue tomorrow as the market picture chart suggested, but the global cues remain an important factor for the market to keep the momentum. The trade summary matrix showed buyers’ dominance above the 4,980 level and, hence, there is a possibility of strong opening for the market tomorrow. The 14 per cent volume in the initial balance 4,890-4,915 range, mostly through change of hands, indicated strong support at the lower levels.
The October futures settled at around the day’s high with 20 per cent volume above the upper band of value area (4,915-4,980), indicating a strong undercurrent. Based on the intra-day trading pattern, the October futures are expected to move up around 5,043-5,063 and likely to get support at 4,950. The top gainers to the index, Reliance Industries, Infosys and ICICI Bank, are expected to help the Nifty to revisit those levels. The October futures of Infosys is expected to move up to around 2,625 and get support at 2,505, ICICI Bank will move up around 865, Reliance around 846, the MKTP chart suggested.
