The strategic buy set-up at 5,177 achieved our first target of 5,550 on Thursday. The data in Nifty February futures suggest fresh upside into 5,612-5,632 and strong support at 5,460. However, the global and domestic cues do not provide the confidence to shift back into the bull phase in the near term, and hence, profit-booking is inevitable. The options traders see some consolidation around the current levels, as we saw unwinding of short positions in the 5,500-strike call options and fresh build-up in the same strike put options.
The buying in futures of index heavyweights suggests that an upside into 5,600 is possible going ahead. There was shortcovering in index heavyweights such as HDFC bank, HDFC, Larsen & Toubro and State Bank of India (SBI). The participants increased fresh long positions in Reliance Industries. Interestingly, the 5,600-strike put options saw an addition of around one million shares through sell-side trades. There was buying in the 5,600-strike call options.
The trade-summary matrix data indicate buy-side trades in the initial balance range (5,460-5,490) with volume declining significantly to 23 per cent from 80 per cent on Wednesday. It implies that the set of new positional payers that entered in the Nifty futures on Wednesday built up long positions. The value area (5,478-5,536) saw significant buying above the 5,515-level. Traders also covered short positions above 5,525, the first hurdle for the bulls to gain control.
The market picture chart indicates an upside at 5,612-5,632 and lower-end support at 5,495. The spot Nifty is expected to get time-price opportunities- (TPO)-based resistance at 5,602, while volume-based selling is seen around 5,635. Options traders have been continuously unwinding short positions in calls above the 5,300-strike price on expectation of a limited downside from the current level.
The way forward in the short-term — till end March — is consolidation with bias for weakness into 5,350, says J Moses Harding, head-global markets group, IndusInd Bank.
Among stock futures, HDFC Bank may see volume-based upside at Rs 2,263 while it is poised to go up around Rs 664, the TPO-based projection suggests. Reliance Industries may see consolidation at around 927-950 before climbing into 975. SBI may move up to Rs 2795.
