The Nifty On Tuesday hit an intra-day high of 4,842 and closed at 4,805 after witnessing profit-booking at higher levels. On Tuesday trading pattern in the derivatives segment suggests that profit-booking may continue even above the 4,850 level.
Futures and options (F&O) traders seemed to have started distributing long positions as the Nifty September futures did not add any open interest (OI) despite recording a trading volume of 25.91 million shares. This indicated that traders expected the market to go sideways from the current level as the Nifty was likely to face a strong resistance above 4,850.
Unwinding of long positions was noticed in 4,600-4,800 calls, while the 4,900 call saw build-up of fresh short positions. Despite thin volumes, OI in the 4,700 call declined 13.6 per cent and the Bloomberg data suggested that traders were booking profit when the index started trading above 4,830. The 4,800 call witnessed a 6.84 per cent decline in OI despite a trading volume of 7.07 million shares. The decline in OI was largely due to profit-booking at higher levels, the Bloomberg data on intra-day trades suggested.
Change of hands was noticed in the 4,700 put as this strike put added 36,900 shares in OI despite a trading volume of 7.78 million shares. The 4,800 put witnessed profit-booking and distribution of open positions as it added 114,450 shares in OI despite a trading volume of 6.29 million shares.
Resistance is expected around the 4,900 level as this strike put added 418,250 million shares in OI, mostly through sell-side trade, out of a total trading volume of 1.02 million shares. Support continued at the 4,600 level as this strike call held an OI of 5.58 million shares.
Index heavyweight Reliance Industries (RIL) almost achieved the indicated target of Rs 2,100 as its September futures made an intra-day high of Rs 2,092. Its September futures closed at Rs 2,075 due to profit-booking. Profit-booking was also seen in the 2,100 call, while traders were seen writing the 2,130 call. This means RIL may face resistance above the 2,130 level.
