The Nifty is in the process of consolidation with strong support at the 5,250 level and resistance above the 5,300 level. A sharp upmove is expected only if the index closes above 5,315 with big buy-side volumes. The Nifty May futures, which closed at a discount to the spot and added 1.10 million shares in open interest (OI), saw build-up of short positions above the 5,285 level.
Long build-up was seen around 5,260-5,285 levels, indicating strong support below the 5,260 level. The price projection using time-price opportunity (TPO) and volume chart suggest resistance above the 5,302 level and support below the 5,240 level. Yogesh Radke, analyst at Edelweiss, says if the Nifty advances decisively above 5,330, then it will open on the upside till 5,500.
Significant build-up was visible in 5,300, 5,400 and 5,500 call options, indicating strong undercurrent. The intraday trading pattern in these call options shows buy-side trades from big institutional players and profit-booking from retail participants. Overall, these calls added 2.36 million shares in open interest, mostly through a change of hands, indicating long build-up.
The May Series has started with the highest open interest in the 5,200 put option, which will act as a strong support in the near future. However, the support is expected to move above the 5,300 level, as this strike put has added 0.55 million shares in open interest, mostly through sell-side trades from big volume players. The 5,400 put saw an open interest build-up through sell-side trades.
Among stocks futures, Ashok Leyland saw long build-up above the value areas from big buyers. The May futures of Ashok Leyland closed at Rs 60.15 and added 3.97 million shares in open interest is expected to move above the 63 the TPO indicator suggests. State Bank achieved the TPO price target of Rs 2,290 on build-up of long positions. The May futures of SBI expected to move around Rs 2,328 the TPO data suggests.
