The June series began with a bang, thanks to long-side rollovers in the index as well as stocks futures. As expected, the Nifty faced resistance around 4,500 and closed at 4,449. It is expected that the long-side rollovers will be positive for the market and there may be further consolidation in the index.
Barring negative global cues, the market is expected to remain firm on Monday and if the Nifty closes above the 4,500-level, then it may reach 4,650. The next resistance is seen at 4,650.
The Nifty June futures closed at a premium to spot and added an open interest (OI) of 1.61 million shares, indicating the creation of fresh long positions. Traders were seen booking profit at higher levels when the Nifty futures were trading around 4,496.
Trading volumes continued to be thin with 510,729 contracts of 50 shares each changing hands despite the Nifty gaining over 150 points intraday on Friday. This means that traders could not participate due to sharp upside after the noon session while bears were playing a waiting game to go short at higher levels.
The 4,500 strike call added an OI of 270,750 shares despite a trading volume of 6.41 million shares. However, the 4,600-4,700 calls added an OI of 1.43 million shares, mostly through buy side trade indicating that the options traders expect the Nifty to go up to the 4,650-level if it closes above the 4,500-level. The options traders are building a new support base for the Nifty at 4,400-4,500 as these strikes puts added an OI of 1.06 million shares mostly by sellers.
