The Nifty rebounded from the time-price opportunity (TPO) support of 5,360, but was unable to remain above 5,400 on profit-booking at higher levels. Going ahead, the Nifty may move above 5,417 and face volume-based resistance at around 5,427. The TPO support remains at 5,360. Further, the build-up of open interest (OI) in the Nifty put and call options indicates that the 50-share index may not slip below 5,300 in the near future.
The Nifty July futures continues to trade at a premium to spot despite there being no fresh build-up in OI. This suggests new entrants have taken position at current levels even as old players have exited.
Foreign institutional investors (FIIs) hold a 48 per cent share of gross market positions in the index futures and have been net sellers in the last couple of days. This means that the FIIs' sell positions are getting absorbed through new players who, in turn, will play a crucial role in the market in the days to come.
The intraday trading pattern shows more buy-side trades at lower levels, indicating a long build-up. However, significant volumes created in the value area (5,370-5,390) in the last couple of days indicate that participants are expecting the Nifty to consolidate around those levels before breaching immediate resistance at 5,453. Profit-booking continues above 5,400 with 30 per cent volume.
According to options data, the 5,300 level will continue to act as a strong support for the Nifty as this strike put holds the maximum OI among all puts.
The 5,300-strike call holds an OI of 4.32 million shares, compared to 7.48 million shares in the 5,400-strike call and 10.32 million shares in the 5,500-strike call, suggesting a strong resistance above the 5,400 level.
Among stock futures, Axis Bank closed above the upper band of its value area (Rs 1,322) on a long build-up of 691,000 shares. However, the mid-point area was higher than the point of control and, hence, the stock may face a strong selling pressure at higher levels. The TPO-based support is at Rs 1,297, while volume-based support for the bank’s stock is at Rs 1,289.
LIC Housing Finance was up 8.14 per cent at Rs 1,083.70 on short-covering and a long build-up. The market picture data suggests an upside of Rs 1,107 based on volume, while the TPO support is seen at Rs 962.50.
