The Nifty is likely to consolidate in the 3,150-3,250 range before a decisive breakout on the either side, expect technical analysts. The options data for the day suggest that the Nifty has support around the 3,300 level and resistance at the 3,400 level. The open interest (OI) at 3,500 and 3,600 strike calls suggests that the index reaching the technical target of 3,600 in the current settlement looks impractical.
According to technical analyst Ashish Shroff of Ambit Capital, predicting the next move is now getting difficult, day after day, mainly on the back of high volatility. Momentum indicators suggest that there could be a near-term rebound as markets are oversold and signal positive divergence. But, on the other hand, the sentiment on the Street is negative, suggesting that any rebound will face selling pressure at higher levels.
Both the benchmark indices gained by over 4 per cent each on the back of short-covering in Reliance Industries, ICICI Bank and State Bank of India. Frontline technology stocks consolidated yesterday’s gains with TCS (up 14 per cent), Satyam Computer (up 9 per cent) and Wipro (up 5 per cent) on short-covering, while Infosys Technologies went up by 4 per cent on creation on long positions.
The Nifty November futures witnessed rollovers of 2.64 million shares as F&O traders were in a hurry to shift their long positions as they expect the Reserve Bank (RBI) of India to come out with market-friendly measures on October 24 in its mid-term monetary policy review.
Several mid-cap banks and realty futures witnessed short-covering in October futures contracts as traders expect RBI’s monetary measures to fuel stock prices further up. However, traders were wary of rolling over their positions in the November futures contracts as the current volatility is as high as 70 per cent.
