As expected, the September futures moved in line with our price-based projections, facing resistance above Friday’s low of 5,064 and getting support at 5,019. However, the futures witnessed a significant short covering and closed around the middle of the day’s range (5,018-5,064), indicating buyer-seller equilibrium. Interestingly, the futures did not violate any significant support or resistance levels and, hence, it is very difficult to project the price range for tomorrow. For now, it becomes mandatory for the Nifty to cross the 5,064 level for fresh advance into 5,100. However, weak global markets could lead to a fall below the volume-based support level of 5,007.
The volume in initial balance (IB) range, the price range established by the floor traders in the first two TPO time period of 30 minutes each, suggested short covering below 5,040 and change of hands above that level. The volume and TPOs (time-price opportunities) in IB range (5,032-5,065) and value area (5,028-5,052) increased from the previous week’s average of 45-55 per cent to 75 per cent, indicating active participation of other time-frame traders. The trade summary matrix suggested buy-side trades, but there was unwinding of 177,250 shares in (OI) post trading settlement despite OI build-up of 1.63 million shares intraday, indicating entry of new bulls/bears in the market.
The market undercurrent turned weak and if the Nifty failed to hold support at 5,007, it could revisit the recent low of 4,901. Strong global cues could lead to volume-based pullback at 5,060-5,080. However, the pullback from the day’s low of 5,017 and 55 per cent volume below point of control (POC-5,042) indicate strong support below the day’s low level. Nevertheless, the OI in the 5,000-strike put options at 8.01 million shares has been higher, compared to OI at 5.75 million shares in the same strike call options, indicating strong support at 5,000. The OI in the 4,900-put options has been more than doubled compared to same strike call options and hence the Nifty may not revisit the recent low.
The day’s top losers, ICICI Bank, Larsen & Toubro and Infosys Technologies closed on a weak note, mostly below the lower end of the value area on profit booking. The market picture chart hinted at fresh downside for ICICI Bank around 846, Larsen & Toubro around 1,537 and Infosys around 2,332.
