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| Nifty set to close above 5,330 |
| B G Shirsat / Mumbai Jul 09, 2010, 00:08 IST |
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The Nifty opened gap-up on strong US sentiments, but got subdued thereafter in the absence of volume support at higher levels. Market participants remain indecisive at higher levels as the Nifty July futures closed where it opened. An intraday Doji pattern suggests the possibility of an either side breakout.
Technically, the Nifty has given indications for a breakout from the flag pattern and the target for the same comes to 5,500 in the short term. The short-covering in the 5,400-strike call suggests the Nifty is poised to close above 5,330 and may breach the resistance at 5,370 thereafter.
The Nifty July futures closed at a premium to spot and shed over four million shares in open interest (OI) in intraday trade. At close, the OI came down by over two million shares to 30.58 million, indicating short-covering from bears. The trading pattern in July futures saw major activity at 5,305-5,330 levels with 79 per cent of the trades changing hands.
According to market data, there was short-covering from top traders in the value areas, while some profit-booking was seen above 5,330 from retail investors. On the basis of time-priced opportunity (TPO) data, resistance is seen is at 5,350, while volume-based support can be seen at 5,272.
Traders covered short positions of around two million shares in the 5,300-5,400-strike calls on expectations of a breakout above 5,330 levels.
The medium-term target of 5,500 is expected to be achieved, if accumulation of OI in the 5,500-strike call through buy-side trades is any indication. The 5,500-strike call holds OI of 9.22 million shares, mostly on account of the hedging of short positions.
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