The Nifty June futures nearly achieved the set objective at 5,330 after getting support at 5,257. However, the June futures returns to the initial balance (IB) range (5,256-5,296) after getting extension of around 5,326 because of selling pressure from other time-frame traders.
The Nifty moved within the previous day’s value area, after facing selling pressure at the higher level. This means, if trading during the IB range returns to the prior day’s value area and today’s value is not built above/below previous value, then opening may serve as a tail, which is a rejected price.
So we may see significant selling pressure tomorrow if the Nifty moves above 5,300 and fails to cross the most crucial resistance at 5,330. The multiple point of control (PoC), identifies as the price level where the market has spent most time trading, indicating the indifferent approach from traders on price equilibrium. The Nifty also closed near the lower band of value area (5,276-5,312) with almost 25 per cent volumes below the day’s closing level. This clearly means, the Nifty may face strong resistance above 5,300 and lower-end support below 5,260.
The Nifty June futures settled at a two-point premium to spot and shed 1.10 million shares in open interest (OI) through buy-side trades. The trading data suggest that bears expected to have covered short positions when the Nifty slipped below 5,296. The July futures which settled at an 11-point premium to June added 448,650 shares in OI, indicating a rollover of long positions.
Based on the market picture chart (MKTP) sourced from Bloomberg, the down risk for the Nifty is at 5,227. However, a strong closing above 5,260 hints at price level around 5,337. The downside now is limited to around 5,230 and if the Nifty moves above 5,337 with significant higher volumes, the price-based resistance is likely to come around 5,380. The trading volume in the initial balance (IB) range (5,256-5,296) for the first two TPO time periods of 30 minutes each, suggest upside resistance at 5,295.
The options traders have covered up short positions in the 5,400-strike put and have built up significant short positions at 5,300-strike call. The significant OI build-up was seen at the 5,200-strike put through sell-side trades. This clearly means the upside resistance above 5,300 and support at 5,200.
