The tussle between the bulls and bears for supremacy ended in a Doji pattern on Wednesday. A Doji forms when the opening price is the same or very close to the closing price. Thus, the market is telling us that it is at a balance, and, hence, there is no definitive buy or sell signal gathered from this. However, this was a more commonly balanced Doji, and the presence of buyers and sellers were at an equilibrium.
The momentum in the first four trading sessions of the July series suggests the market could be in a congestion phase. The upward momentum is facing resistance above 5,666, while the support is being maintained at 5,635. The poor volume since Monday, and the static open interest (OI) positions in July futures indicate a balance between buyer and seller. The buyers are protecting the 5,635 level, while the bears are not allowing the market to move above 5,666.
The trade summary matrix, or data, on the indicative buy-sell bids by the traders, hints at a change of hands. The selling pressure was clearly seen above 5,650, while significant buying was seen below 5,637. The Nifty July futures saw sell-side bias in the initial balance (IB) range (5,636-5,667) and a change of hands in the value area (5,628-5,652). The market saw 58 per cent time price opportunity counts above the point of control (PoC- 5,636), indicating that there was more selling activity than buying activity, and a net selling day.
The July futures settled at 5,636, a 11-point premium to spot, and added 101,700 shares in the OI. The market picture chart sourced from Bloomberg, suggests price-based fall around 5,611 and volume-based support around 5,603. The high and low range for the July futures are seen at 5,674 and 5,603, respectively, based on the price pattern in the last three trading sessions.
There was listless trading in the 5,500-strike call options and, hence, a strong support base for the bulls. The options traders turned buyers in the 5,600-strike, as they expect the Nifty to be range-bound, which may find support below 5,600. Strong resistance is seen above 5,700, and, hence, a significant increase in the short-position in 5,700-strike call options. The sell-side OI build-up at 5,600-strike put options, through sell-side trades, indicates short-term support.
