After a minor pullback at 5,040, the Nifty September futures flirted with the previous day’s low of 4,901 and closed in a Doji pattern on short covering at the lower levels. The steep fall from 5,040 to the day’s low of around 4,904 suggested strong support at 4,900 and resistance around 5,050. The close above 4,900 is comfortable, but the underlying mood is bearish.
So, if the Nifty failed to maintain strong support of 4,901, it can test major support at 4,820 in the near future. The market will stay tuned to global cues and it would need strong reversal in the sentiment there to drive the market up here.
The Nifty September futures opened in the green and after moving below the most crucial support at 4,950, it re-tested the lower-end support at 4,900. A late recovery ensured a closing at the 4,940 level, marginally below the most crucial support level.
The trade summary matrix showed buy-side bias, but a mixed signal from top traders. Floor traders changed hands in the first two time price opportunity (TPO) periods of 30 minutes each, while net buying was noticed in the value area in the range of 4,938-4,997. The IB (4,972-5,008) range established by floor traders showed buy-side bias below 5,000 and change of hands above 5,000.
The September futures closed at par with the spot and despite adding 1.85 million shares in open interest (OI) during the trading session, there was no carry-over of positions. The support September futures witnessed significant volume-based recovery at the lower level to settle at 4,941. This volume-based recovery if continued, the Nifty can move up around 4,980 tomorrow. Nevertheless, strong global cues would see a fresh recovery to 5,040-5,080, the market picture chart sourced from Bloomberg suggested. But the volume base selling may pull-down the September futures around 4,821.
Trading data showed lack of interest in 4,800-4,900-strike call options and 5,100-5,200-strike put options. The fresh short build-up was noticed in the 5,000-5,100-strike call options (OI up 1.19 million through sell-side trades) as participants expected the Nifty to face resistance above the 5,000 level. The open interest in the 4,800-5,000-strike put options remained unchanged despite significantly high volumes of 60.32 million shares, indicating change of hands among participants.
