The Nifty is witnessing a strong consolidation after the breakout, which hints that the August series’ expiry will be above 5,500. Call and put options participants, who also expect this, covered their short positions in the 5,500-strike call even as they built up fresh short positions in the same strike put.
The short-covering in the 5,600-strike put and an open interest (OI) build-up in the same strike put gives an outside chance to the Nifty to break through some crucial resistance above 5,550 to achieve an upside target of 5,600.
Nevertheless, traders covered shorts in the Nifty August futures, as it is now trading at a discount to spot and has shed an OI of over 4.84 million shares from intraday level. The September series saw a rollover of 3.31 million shares at premium, which indicates a long build-up. The rollover in the September series is marginally higher at 10.58 million shares, while the OI build-up in the current series is significantly higher three days ahead of expiry. This means profit-taking is likely to increase during the course of the expiry.
Over 70 per cent of the trading time and 69 per cent of trading volume in the August futures changed hands at 5,522-5,536, mostly through buy-side trades. This indicates continued support above 5,500. The point-of-control, indicated by intraday time-price opportunities (TPOs) of 30 minutes each, indicate strong volume-based resistance above 5,555 and TPO-based support at 5,511. The Nifty September series is expected to trade above 5,524 with an upside target of 5,563, but the TPO-based resistance is seen at 5,551.
Among stocks futures, ICICI Bank is expected to move up further, while State Bank of India is likely to face some profit-booking. The intraday TPO and volume-based projections indicate that ICICI Bank's August futures is expected to get support at Rs 966-970. However, a strong volume-based surge on account of short-covering after opening of European markets indicates that ICICI Bank may not go below Rs 1,000 level immediately. The stock is expected to move around Rs 1,023, according to TPO data.
State Bank of India witnessed some profit-booking above Rs 2,835 and settled at Rs 2,824.85. The TPO and volume based projections indicate resistance above Rs 2,850.
