The Nifty maintained its support of 4,910 and moved swiftly above 5,000 to close at 5,054 on firm global cues and short-covering in the futures and options (F&O) segment.
However, index heavyweights Reliance Industries, ICICI Bank and State Bank of India saw profit-booking at higher levels. Hence, there may be profit-booking in the Nifty futures above 5,100.
The Nifty October futures settled at 5,059 as against the trading average of 5,012, indicating short-covering by bears. Bloomberg data suggested that 51 per cent trades were at an average of 5,046 with bid and ask trades accounting for 22.4 per cent volumes each. This means bulls booked profit at higher levels while bears covered short positions.
The Nifty futures shed 154,400 shares in open interest (OI), indicating profit-booking by long traders. However, the Nifty November futures continued add fresh OI and were trading at a premium of 10-15 points over the spot as well as over the October futures. This means traders expect end of range-bound trading and a fresh upside in the Nifty next month.
Short-covering and unwinding of long positions was seen in 4,900-5,200 strikes calls as bears expected the Nifty to move above 5,100 while bulls expected a retreat after these levels. The 5,300 call options added 161,500 shares in OI, mostly through sell-side trades, indicating that the index has strong resistance above 5,300.
The support for the Nifty is expected at around 4,900-5,000 levels, which is unlikely to be breached in this settlement. The 5,000 put options added 1.51 million shares in OI through sell-side trades, indicating that the Nifty has strong support at 5,000 levels.
