Current series may close around 4,900

The poor rollovers in Nifty March futures indicates that the futures and options (F&O) participants remained indecisive and were not willing to take positions before the Union Budget. The rollovers were at 17.65 million shares compared to 22.94 million in February a day before the series expired. This, and the fact that the March futures are trading at the discount to the spot as well as the February futures, indicate that the bears have not been aggressive in rolling over their short positions.

Nevertheless, as expected, the Nifty moved in narrow range and closed in a Doji pattern, indicating indecisiveness and probably a volatile expiry session. Bloomberg data suggest the current month’s series may expire around 4,900 as participants are covering their short positions in Nifty February futures despite only a day left for the expiry of the current month’s series. However, there was profit-booking above 4,875, but few buyers.

Traders covered short positions at 4,800 and 4,900 calls of the February series, which indicates the Nifty may not go below 4,800 on the day of the expiry. The support on the last day of the current month’s series continues around 4,800, with strong resistance between 4,900 and 5,000.

F&O participants built long positions at 4,800 and 4,900 calls of the March series, probably to hedge short positions in Nifty futures. The resistance for the March series continues around 5,000 based on build-up in open interest positions. The support is expected around 4,500 as this strike put of the March series holds the highest open interest among put options. However, long straddle was seen at 4,800 as traders bought 4,800 call and put options.