The Nifty closed above 6,000 on short-covering when it started trading convincingly above 5,950. The December futures, which closed on a par with the spot, saw significant short-covering in the value area (5,925-6,000), while there was long build-up below 5,950 from liquidity providers. The December futures, which closed at 20 points premium to November, saw long rollover of 3.69 million shares. Going ahead, the Nifty is expected to get strong resistance above 6,060 and support below 5,900.
The market is expected to be range-bound in the next three trading sessions as the November series saw significant short-covering by bears.
The rollovers in Nifty December series have been on expected lines, but the cost of carry has fallen to 10-20 points from more than 30 points same time last month. This clearly indicates that participants are not willing to take exposure at the current level and are waiting for stability in the market.
However, there are no bearish factors in play to chase the current weakness. The market picture chart based on day’s trading suggests the time-price opportunities (TPOs)-based decline around 5,857 with volume-based support at 5,847. The volume-based recovery after 12.30 pm at the index level of 5,950 is hinting at a TPO-based upside of 6,077 and volume-based surge around 6,090. The Nifty December futures are expected to move up around 6,117.
Nifty options data indicate short-covering in the 5,800-6,000-strike calls and change of hands in the 6,100-strike call options. This means the index may not go substantially below 6,000 and face strong resistance above 6,100. The trading pattern in December calls suggests resistance for the Nifty above 6,100. The build-up of open interest in calls and puts of the November series is hinting at support at 5,900 and resistance above 6,200.
Among stock futures, ICICI Bank, Tata Steel and Tata Motors gained more than three per cent on short-covering. ICICI Bank, which closed at 1,192, saw strong support above Rs 1,170, with almost 65 per cent of the day’s trading volume changing hands above 1,172. No wonder the market picture chart is hinting at a volume-driven upsurge to around Rs 1,217.
