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| Support for Nifty seen at 4,530 | | F&O OUTLOOK |
| B G Shirsat / Mumbai Jul 29, 2009, 00:43 IST |
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Markets opened on a positive note but witnessed profit-booking at higher levels. This resulted in indices closing with a Doji Pattern. The pause in the last couple of days has led to consolidation before a big-bang movement after the expiry of the July futures.
The Nifty is trading in a narrow range of 50-60 points with upside resistance at 4,610 and support at 4,530.
Trading in the last couple of days indicates profit-booking at higher levels and a fresh long build-up at lower levels. Nifty July futures shed an open interest (OI) of 2.60 million shares due to profit-booking, while the August futures added an OI of 4.14 million shares, mostly through buy-side orders.
However, the OI in Nifty August series was considerably higher at 12.35 million shares compared with 6.08 million shares at the same time in the July series.
According to a technical analyst at Angel Broking, a narrow range suggests indecisiveness at current levels.
Momentum indicators do not suggest any substantial weakness at 4,528-4,500 levels, which may act as a support.
Options traders expected the index to find support at 4,500-4,600 levels in the next two sessions as 4,500 and 4,600 puts added an OI of 229,800 shares while the same strike calls added an OI of 547,450 shares despite only two trading days remaining for the expiry of the July series.
The market is expected to remain firm during August with the Nifty expected to cross its pre-Budget high of 4,695 early next week. Traders were buying the 4,600 call of the August series at a premium of Rs 166 per share, indicating a possible upside to 4,766 sometime next month.
The 4,500-4,700 puts of the August series together added an OI of 826,950 shares, indicating support range for the market next month.
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