The Nifty opened on a positive note on Monday and |continued to trade in the green. However, the index closed below the 3,000-mark on account of profit-booking in key index stocks. The Nifty closed the day at 2,981, which is fractionally below its 40-DMA (daily moving average) of 2,985 and hence we may see corrections if the index fails to close above 3,000. Support for the Nifty is seen at 2,940, while it would face selling pressure above the 3,000-mark.
Options traders expect the index to trade between 2,900 and 3,100, at least till the expiry of the current month series on December 24. Call writers were seen unwinding their short positions at 2,900-3,100, while a few others were buying these calls on expectation of a further rise in the Nifty, said Siddhartha Bhamre, a derivatives and equity analyst at Angel Broking.
However, despite strong optimism, there was no increase in the open interest (OI) either in the Nifty futures or in stock futures. Nifty December futures shed an OI of 204,050 shares despite clocking a trading volume of 33.47 million shares, while January futures added an OI of 308,550 shares on the trading volume of 1.61 million shares.
Despite closing on a firm note, December futures ended the day almost on a par with the spot Nifty, while January futures closed with a premium of five points over December futures.
This indicates that traders are not willing to build long positions at the current level, which prevented these futures from trading at a higher premium. The long build-up will be seen only if the Nifty closes above the 3,000-mark, said Bhamre.
Barring Reliance Indus-tries (RIL), which firmed up from the day’s low of Rs 1,276 to close at Rs 1,341.85, many other pivotals closed around the day’s low levels on profit-booking by traders.
December futures of RIL closed at a discount to the spot price and added an OI of 45,600 shares despite registering a trading volume of 11.13 million shares.
This suggests that traders are wary of taking positions on the either side.
