The Nifty today triggered stop loss of 3,400 and, hence, we have to watch out for 3,300 levels to break. However, the put/call ratio of 2.31:1 at 3,300 strike call and put options suggest that the Nifty has strong support at 3,300 levels.
The 3,300 put hold open interest (OI) of 4.75 million shares compared to an OI of 2.05 million shares at 3,300 call options. Since profit-booking put the five-day as well as 14-day Relative Strength Index (RSI) below the neutral zone from overbought zone, we may see some pullback tomorrow.
Domestic bourses today witnessed an extremely volatile session amid political uncertainty and mixed global cues. Investors were wary as a month-long general election got underway amid signs that the two main national parties, the Congress and the BJP, may struggle to form a stable coalition, traders said.
Profit-booking and selling pressure in the final hour of trading pulled the Nifty below 3,400 levels and finally it closed near the day’s low. The Bloomberg data suggested that almost 25 per cent volume in the Nifty April futures changed hands below 3,380 levels, indicating that traders were not willing to keep their holding as the 3,400-level was broken today.
The April futures were trading at a premium of 8-12 points for a major part of the session but closed with a 7-point premium to the spot, indicating that traders continued to hold some long positions.
The April futures shed an OI of 1.81 million shares as traders took advantage of the 18 per cent rise in the index in the last eight trading days and so booked some profit. The Nifty May futures, however, closed at an 8-point premium to the April futures and added an OI of 736,450 shares, indicating rollover of long positions.
