The Nifty June futures closed at a premium to spot, the first time in the current month series on strong economic data from China, Japan and Australia. The traders started covering short positions during the afternoon session on strong opening for the European stocks and positive Dow futures. The market is expected to open on a positive note but the Nifty likely to face resistance above 5,100 levels. However, the afternoon pullback was more of a short covering from the bears as the Nifty June futures added 114,950 shares in the open interest, considerably lower from the intraday build-up of 2.24 million shares. Bloomberg data suggest strong short covering above the 5,070 levels from big traders while small traders were booked profit above the 5,080 levels.
Interestingly, SGX Nifty was trading at 5,090 at OTC counters, up 2 points over official close of 5,088. The Nifty futures today closed above the upper level of the value areas (5,030-5,070) on short covering from big traders. The intraday trading data show that traders were unwilling to build long positive above the 5,070 levels while point of control (POC) was around 5,030 levels.
The Nifty call options data suggest strong resistance above the 5,100 levels while put options data indicate support at around the 5,000 levels. Technically, the Nifty has closed at the day’s high thereby filling the gap formed a couple of days back. This is only positive development for the bulls to cheer.
Among stocks futures, Bharti Airtel, Larsen & Toubro and State Bank of India witnessed strong rally on short covering. Bharti Airtel June futures up 4.78 per cent and shed 397,500 shares in open interest despite an intraday build-up of 1.58 million shares. The market picture data show fresh upside for Bharti around Rs 291.
State Bank of India gained 2.7 per cent on short covering above the 2,302 levels. The trading data indicate that SBI may face strong resistance above the 2,320 levels.