4,300-4,400 level seen on expiry

The Nifty closed near the day’s high on short covering in the futures & options (F&O) segment on account of favourable news from the domestic as well as global front. The Nifty May and June futures ended with a premium to spot, indicating short covering by bear operators. However, these index futures changed hands at the 4,227-4,240 level compared to the closing level of 4,284-4,294, indicating that there has been no fresh buying or short covering at higher levels.

The Nifty May futures has shed an open interest (OI) of 3.04 million shares, while the Nifty June futures added an open interest of 3.27 million shares, indicating that fresh long positions were rolled over. However, the rollover in the June series on the penultimate day of the May series expiry was considerably lower at 20.53 million shares compared to 27.6 million shares last month. This means only long positions have been rolled over and short positions were covered through buying of call option.

The 4,300 call option of the May series has shed an OI of 852,650 shares, indicating unwinding of short positions despite a day left for the expiry. An intraday volume of 10.5 million shares also indicates short covering as bears expect the Nifty to close above the 4,300 level on expiry. The 4,400 call of the May series holds an OI of 1.79 million shares and has shed 54,750 shares, indicating that the option traders expect the Nifty to settle around 4,300-4,400 on expiry.

Traders were seen buying the 4,500 call of the June series at a premium of 90 per cent, indicating that the Nifty could target this level on the first day of the June series.