Difficult for Nifty to revisit 6,100

The Nifty October futures managed to close at 6,014 after testing the crucial support of 5,980 on account of short-covering from small traders.

A close above 6,000, though, brought some comfort to the bulls. However, breach of support from the day’s high of 6,076 with considerable high volume was alarming. The October futures shed 90 points from the day’s high in the last 90 minutes with 40 per cent volume changing hands in this period.

This volume-driven selloff in the closing session is expected to take the futures below 5,950 in the near future. The time-price opportunities (TPOs) chart for the last 90 minutes is hinting at support at 5,915. On the intra-day market picture chart, the October futures is expected to move up around 6,107, based on TPOs. The volume picture suggests strong resistance at 6,127. Nevertheless, the market looks weak due to a bit of a reversal today.

For now, we must watch consolidation within 5,925-6,075 with break either way not expected to sustain, says Moses Harding, head (global markets group), IndusInd Bank. A close above 6,030 will be the first trigger for shift of near-term range to 6,130-6,280 and a close below 6,000 will shift the focus back to the next strong base at 5,800. The put options participants seem to be supporting this view as they have started unwinding short positions in the 6,000-5,900-strike puts.

There was large build-up in the 5,800 put options and change of hands in the 6,100 put options. There was build-up of short positions of 1.08 million shares in the 6,000 call options and change of hands in the 5,900 call options.

The call option participants booked profit in calls below 5,900. This gives a clear indication that the Nifty may find it difficult to revisit the 6,100 levels in the near future and that support at 6,000 is breakable. The new support may emerge at 5,800 if the Nifty closes below 5,900 in the near future.