The Nifty opened on a positive note, rose to 6,160 on short-covering, and closed at 6,106 on profit-booking. The Nifty October futures continues to trade at 25-30 points premium to the spot, but is finding it difficult to break the upper resistance of 6,200.
So, the market is expected to trade in the 6,090-6,180 range for the next couple of days, unless global cues recharge it beyond 6,200. However, being the expiry week, open interest build-up in 6,100-strike call and put options suggests the market is likely to be range-bound for the next three trading sessions.
The time-price opportunities (TPOs) and volume data suggest weak opening for the Nifty tomorrow. On the intra-day market picture chart, the Nifty October futures is expected to fall around 6,102 and get volume-based support at 6,092. The index has been facing strong resistance in the initial balance (IB) range (first two TPO time periods) as it was a major supply zone in last week’s trading. No wonder the futures saw almost 100 per cent volume in the IB range (6,120-6,180), mostly sell trades, and so futures closed at 6,137 due to profit-booking around the upper band of the IB range.
Fresh rollovers in the Nifty November futures were higher at 3.08 million shares compared to unwinding of 2.09 million shares in the October futures. However, total rollovers (8.48 million shares) in the November series are significantly less than the 13.40 million shares in the October series same time last month. This means bulls and bears are wary of taking positions before two most decisive conflicting signals ahead. Domestic cues are negative if the Reserve Bank of India raises rates to tighten liquidity, while global cues are positive on expectation of aggressive second quantative easing and extension of zero interest rates in the US for some more time.
There was short unwinding in the 6,000 call options and fresh short build-up in the same strike put options, hinting at a strong support level. The open interest at 6,100-strike call and put options has been identical around 5.5 million shares. The 6,200 put options today added 677,900 shares in open interest at an average premium of '80 per share, while the 6,200 call options saw profit-booking and change of hands. So, the trading pattern in call and put options suggests that October is likely to close at 6,090-6,135.
