As expected, the Nifty see-sawed between resistance and support levels on Wednesday to finally close in the red on weak volumes at the higher level and profit-booking thereafter.
The spot Nifty closed at 5,970, just above the immediate support, while December futures settled around 6,000. The trade summary matrix reveals buy trades in December futures in the initial balance range established by day traders and liquidity providers. However, the top traders were net sellers above 6,014, which pulled the futures to 6,000 from the day’s high of 6,043.
The trading pattern in Nifty December futures does not show significant weakness in the market, as top traders used the rally above 6,000 to book profits, while retail and mid-sized participants covered short positions. On an intra-day basis, the Nifty futures added almost two million shares in open interest. However, at close, the carryover positions declined by one million shares, which indicated unwinding of short positions.
The undercurrent remains positive, as the January series, which closed at a 25-point premium to December, added 1.39 million shares in open interest through buy trades.
The trading volume in Nifty put options indicates the index may not trade below 5,900 in the near term, or it might consolidate around 5,970-6,030. The build-up of open interest in call options, however, hints at a strong resistance above 6,060-6,100.
The market picture chart sourced from Bloomberg indicates time-price opportunities (TPOs)-based resistance at 6,062.50, while profit-booking seen in the last 80 minutes of the session can take the index below 5,970 to 5,930. The 5,951 level may act as support for the spot Nifty, suggests the TPO projection.
Among stock futures, Ranbaxy Laboratories and Tata Motors showed considerable strength and closed above the value area on short-covering. Ranbaxy closed two per cent up at Rs 571 on significantly higher volume (up 84 per cent) in the value area (567-573), mostly through buy-side trades. The TPO and volume data hint at a price level of Rs 580. Tata Motors rose 1.4 per cent to close at Rs 1,364 on short-covering in the initial balance range (1,356-1,369). The TPO projection for Tata Motor’s December futures suggests support at Rs 1,344 and the volume picture hints at an upside of 1,379.50 in the near future.k
