The Nifty closed below its crucial support of 5,180-5,200 on weak European markets as concerns over Greek debt problems weakened sentiment.
The next crucial support for the Nifty is around 5,100 while traders are expected to book profit if the index moves above 5,195. Significant build-up of positions was seen in the 5,200-strike call through sell trades by big traders, indicating strong resistance above 5,200. The participants bought the 5,100-strike put (open interest up 309,250 shares) on expectation of a fresh sell-off if the Nifty closes below this level.
Apart from the crisis in Greece, decline in base metal prices in London, with copper hitting seven-week lows on demand worries, affected sentiment. Four metal stocks traded on the derivatives segment declined between 4.4 per cent and 5.6 per cent on profit-booking at higher levels. Hindalco, Tata Steel, Sterlite Industries and Steel Authority of India closed below the lower end of the value area on strong sell volumes, indicting short build-up. The price projection for these stocks using the time-price opportunity (TPO) chart suggests fresh downside. For example, Hindalco, which closed at Rs 163.30, is expected to fall to around Rs 159.
Patni Computer, Divi’s Laboratories and HCL Technologies showed strength in a weak market on short-covering and build-up of long positions. The May futures of Patni Computer closed at Rs 560 on strong buy trades. Based on the TPO projection, it is expected to move around Rs 585.
HCL Technologies is expected to move around Rs 405 from its today’s close of Rs 399 while Divi’s Labs is poised to cross the Rs 700 mark. Among sugar stocks, Balrampur Chini looks weak on account of profit-booking and fresh short build-up. The stock is expected to move below Rs 70, the TPO chart suggests.
