The market kept the upward momentum on the day of June series expiry despite a 450 points gain in eight trading sessions from a low of 5,190 on June 20. Nifty July futures closed at 5,655 after facing strong resistance at 5,667. The rollovers were at a premium and higher by 4.67 million shares indicating continuation of an upward bias.
However, intraday profit booking by other time-frame traders above 5,660 hints at a slowdown in momentum. Though the market is set for a gain into 5,700, considerable resistance above 5,660 levels in yesterday’s session is expected to play a spoil sport tomorrow.
Nevertheless, the Nifty settled above 5,600 as indicated on short covering and strong buy-side bias from other time-frame traders. The market has now seen significant rally from the recent low and hence it is difficult to predict price target based on available data. The Nifty July futures moved in narrow bond of 47 points and settled above the mid point of the day. The July future settled at 5,655, around upper band of initial balance (IB) range (5,628-5,658) and above value area (5,626-5,648) hints at a strong under current. The 60 per cent time price opportunities (TPOs) and 70 per cent volume above the point of control (5,630-5,635) in a rising market indicate buying initiative.
The trade summary matrix data hints at change of hands in IB range. The TSM data show significant buy-side deals below 5,635 and hence the Nifty may get strong support below that level. The upside resistance for July futures is seen around 5,690 while it may get support at 5,602. The market is expected to be in consolidated based on range bound price movement in the key index drivers of the day such as Reliance Industries, Infosys Technologies and ITC. The market picture chart suggest limited upside for Reliance around 905-909 and for ITC around 206-212.
The options traders expect Nifty to face strong resistance above 5,800 and hence significantly increase short position in 5,800-strike call options. The trading volume and open interest build-up in 5,500-5,700-strike price call options of July series indicates intraday short covering and also profit booking as the participants are somewhat cautious in building short/long positions. The support is getting build-up at 5,600 while the resistance is seen above 5,800.
