As expected, the Spot Nifty and futures faced resistance at the higher levels (above 6,000), got strong support at the lower levels (5,860) and closed in a Doji pattern — indicating indecisiveness at the current level.
The market picture chart indicates responsive activity, as there was a selling range extension above Monday’s value area. The selling range extension is a fairly strong breakout or breakdown type of signal. However, the Nifty April futures closed around the upper band of the value area (5,880-5,928) on account of initiative buying at the lower levels. This is a strong indication of consolidation near the current level.
The initial balance range (5,906-6,000), the first two trading periods of 30 minutes each, saw 60 per cent volume and 55 per cent TPOs signalling volume-based selling from floor traders. The point of control (PoC), the area of most traded price, multiple distributions across the IB range and value area, indicates some confusion between buyers and sellers. The value area saw change of hands, with 62 per cent volume and 65 per cent TPOs. The top traders were buyers at the higher level, when the Nifty moved above 5,900 after testing lower-end support. The trade summary matrix suggests profit booking during the early trade and short covering thereafter.
The Nifty April futures closed at a 21-point premium and shed 1.50 million shares in the open interest during the intraday trade, indicating profit booking at the higher levels. The market picture chart suggests price-based rally in the Nifty April futures at around 5,952. The volume-based upside may end around 5,997. The short covering below 5,880 is likely to continue and significant support is seen around 5,861. The spot Nifty could get support at 5,807 and an upside resistance is seen at 5,951. The Bank Nifty is expected to move up around 11,965 and to get strong support at 11,685.
The option traders have initiated sell-side trades in the 5,900-strike call options (OI up 1.59 million shares) and we may see strong resistance above this level. The change of hands seen in the 6,000-strike put options, as participants expect the Nifty to face resistance above 6,000. The participants also hedge the long positions through buy-side trades in the 5,800-5,900-strike put options.
