The Nifty today faced resistance at 4,700 as traders resorted to profit-booking each time the index crossed 4,695. The Index moved in a narrow band and finally closed at 4,680, up 20 points. The broader index is expected to be range-bound tomorrow and is likely to settle between 4,680 and 4,730.
Traders today held their positions at the 4,700 call despite the fact that only a day’s trading was left for the expiry of the August series. The 4,700 call witnessed change of hands on a considerably high trading volume of 13.03 million shares at an average premium of Rs 30 per share.
The 4,700 put too traded heavily with 13.63 million shares changing hands at an average premium of Rs 43 per share. The Bloomberg data suggested that buys and sells were evenly matched and the traders wrote 4,700 calls at an average price of Rs 51 per share. This means the index may settle between 4,660 and 4,730 with the expiry of the August series.
The Nifty August futures closed on a par with the spot, while the September futures settled at a 10-point premium. Both the futures witnessed profit-booking above the 4,695-level as the sell-side volume increased around the day’s high levels and the buy-side volume rose around the day’s low levels. The buying support remained at 4,675.
The September futures seemed to have built up fresh long positions as the August futures shed an open interest (OI) of 2.70 million shares, while the OI in the former increased by 3.59 million shares. Going forward, the Nifty was expected to close above the 4,730-level as traders, apart from building fresh long positions in the September futures, were buying the 4,700 call of the September series too.
The 4,700 strike September call today added an OI of 144,000 shares, mostly from buy-side trades, out of the traded volume of 865,450 shares. The 4,600 and the 4,700 puts of the September series added an OI of over 325,000 shares, each indicating support zone for the index in September.
