The Nifty moved in a narrow range and closed in a Doji pattern as participants were afraid to trade at the current level. The volume in the derivatives segment dropped significantly, over 66 per cent, as the market remained stable and intra-day movements were more or less predictable. Technology stocks, HDFC, Bajaj Auto and Bharti Airtel helped the Nifty close in the green. The market picture chart, which provides an insight into where fair value is and who is controlling the market, is hinting at a narrow band trading tomorrow.
Nifty January futures maintained the time-price opportunities (TPO)-based support of 5,630 and faced strong resistance at 5,700. The futures closed at a three-point to premium to the spot and shed around 1.50 million shares intra-day, mostly through buy trades in the initial balance range and the value area. The trade summary matrix indicates buy trades below 5,666 and profit-booking above 5,680. This means the Nifty is likely to get strong support at 5,630, the day’s low level.
The initial balance range (5,628-5,689) saw 95 per cent volume and TPOs, suggesting that floor traders covered short positions. The value area also saw strong buy trades below 5,666. The futures closed above the upper band of the value area, which signals a strong undercurrent.
The market picture chart suggests that the Nifty futures may get volume-based support at 5,607 while TPO-based resistance is seen at 5,690. The spot Nifty is expected to get TPO-based support at 5,615. However, strong volume-based resistance is seen at 5,697.
Call and put options data show significant buying in the 5,700-strike call options and change of hands in 5,800- and 5,900-strike call options. Put options traders booked profit in the 5,600-5,800-strike put options and did some short-selling in the 5,400-5,500-strike put options. This means stability is returning to the market. Strong support is expected around 5,600 and resistance above 5,700.
Among stock futures, HDFC closed at Rs 664, which is a 23.6 per cent retracement of the recent fall from Rs 738 to Rs 643. The stock is expected to move up around Rs 682, based on the TPO price projection.
