As expected, the Nifty September futures moved in a narrow band for most part of the day and closed above 5,150 on positive opening for European markets. The market is now waiting for two key announcements on the US economy, to ease the debt crisis and expecting a proposal from US President Barack Obama to inject more than $300 billion into the economy next year. The market friendly development could help the domestic market keep the current momentum intact. There is strong possibility of the September futures crossing the 5,200 mark tomorrow if the US events lift the global markets.
The Nifty September futures have comfortably taken out immediate resistance around 5,130, to close around the day’s high on account of short covering from floor traders and fresh buying from other time-frame traders.
According to Moses Harding, head global markets group, IndusInd Bank, the near-term bullish mode is intact for assault at the next hurdle at 5,210, ahead of 5,325. There are good signs of a shift to a bearish stance to neutral on concerted G7 efforts to get the developed economies back on track. Fed may not send unpleasant signals to the market.
The market is expected to open on a strong note tomorrow, as the September futures saw significant buying after consolidating at around 5,114. The September futures moved up smartly after moving in the range to settle at 5,162, on account of volume-based short covering from top traders.
Buyers dominated the rise as the point of control (PoC-5,130) saw 58 per cent TPO counts above that level. The volume in the initial balance (IB) range of 5,088-5,132 improved to 58 per cent from 34 per cent, mostly through buy-side trade. The value area (5,104-5,148) saw significant short covering above 5,121.
The market picture (MKTP) chart projected a time-price opportunity (TPO)-based support of 5,086, which is close to the day’s low of 5,088. Volume-based upside could take the September futures above 5,226. The crossover of 5,150 with strong volume has strengthened the bulls and they are now waiting for the final onslaught into 5,305. Index heavyweight Reliance Industries may join the bull’s bandwagon with a strong rally around 900. Options trading hinted at long build-up in 5,200-5,300-strike call options and fresh short build-up in the 5,100-strike put.
