The Nifty faced strong resistance above 5,206 and closed towards the lower end of the support level of 5,180 on short-covering. The open interest (OI) build-up in the 5,200-strike call and put options suggests the index is likely to consolidate around 5,200 for a few more sessions before moving above 5,206.
Nifty May futures saw short-covering by big traders when the index moved above 5,190. It succumbed to selling pressure above 5,206. In the options segment, participants took short positions in 5,000- and 5,100-strike puts and hedged their long positions in Nifty futures by going for the 5,200 put. The 5,300-strike saw change of hands from buyers to sellers.
Profit-booking was seen in the 5,100 call and traders hedged short positions in the 5,200 call. This means the index enjoys strong support at 5,100 and is expected to consolidate around 5,200. The current rally is expected to continue around 5,300 if the index closes above 5,206 on strong volumes.
Reliance Industries, as expected, failed to remain around Rs 1,100 due to profit-booking at higher levels. The stock, however, showed strong buy activity from big traders around value areas (Rs 1,076-1,090). The value area includes over 70 per cent time-price opportunities (TPOs) and volumes. The stock is poised to move around the Rs 1,100 base on the basis of the price projection using TPOs.
Infosys Technologies moved in a narrow range on lack of buying at higher levels. According to TPO data, there could be resistance around Rs 2,705.
ICICI Bank also saw selling at higher levels. The stock closed in the control area, which was below the mid-point of the day. The price projection (on the basis of TPO charts) and volumes indicate ICICI Bank can move down to around Rs 920 and face resistance above Rs 936.
Renuka Sugar rose 5.2 per cent on short-covering. However, the trading pattern in May futures indicates only short-covering above Rs 55.50. The share’s TPO charts were lower than the mid-point value and, hence, the stock has very limited upside from the current level.
