Key benchmark indices, the BSE Sensex and S&P CNX Nifty, closed in a Doji pattern on weak global cues, indicating uncertainty ahead of the expiry of this month’s series.
Trading data in the futures and options (F&O) segment suggest participants covered short positions in Nifty futures and built fresh long positions in 5,300 strike call options.
The 5,300 and 5,400 puts saw profit-booking, which indicates that speculators expect a rally above 5,300 after the current consolidation is over.
Nifty January futures shed 0.76 per cent in open interest despite intra-day build-up of 7.4 per cent, indicating short-covering. The February futures added 20 per cent in open interest, mostly through buy-side trades, indicating rollover of long positions.
Stocks from real estate, pharma, FMCG, oil exploration and oil marketing companies were weak. Metal stocks rose. DLF was down 1.5 per cent on profit-booking while Unitech fell 2.9 per cent on short build-up in its January futures. The oil marketing companies, BPCL and HPCL, fell over 4 per cent on profit-booking and short build-up by speculators on reports the government has no plan to raise fuel prices as of now. FMCG giant Hindustan Unilever rose 1 per cent on fresh long build-up while ITC fell 1.3 per cent on profit-booking. Tata Steel, Jindal Steel, Steel Authority of India, Hero Honda and Maruti Suzuki rose 1-3 per cent on long build-up.
The Nifty opened positive and remained lackluster in the early part of the trading session. Failure to advance past 5,250 led to profit-booking in the second half of the day. The trading band of 5,180 and 5,300 has been so narrow that a directional break cannot be far off, says a technical analyst at Edelweiss Research. It has been a trend versus momentum set-up. While the index remains in the bullish trend, the momentum keeps waning. The support zone of 5,180 remains strong while 5,300 remains the strongest supply zone.
