Expect a positive opening in Muhurat session

The October series on Tuesday expired on a strong note as the Nifty November futures settled above 5,200 with significant premium to spot. We had indicated strong momentum above 5,200 on October 20, but it could not happen due to weak global markets in two consecutive trading sessions. The market undercurrent on Tuesday changed dramatically from bearish (after 25 bps rate increase) to bullish after RBI signalled nearing the end of its record cycle of rate increases. The strong movement, however, came after participants started covering short positions when the Nifty moved out of the immediate resistance zone (5,160).

The bull's dominance is expected to continue, the market picture (MKTP) chart suggested, but the global cues remain an important factor for the market to maintain the momentum. The MKTP chart sourced from Bloomberg hinted at a price-based upside around 5,350, and the market to remain bullish. Support is expected to come around 5,103.

A long build-up was seen in the 5,200-5,300-strike call options, as traders expected a strong momentum in the market in the new series. The change in sentiment from bearish to bullish has also been indicated by the short build-up in the 5,100-strike put options.

The top gainers in the index, Reliance Industries, Infosys and ITC, are expected to help the Nifty to revisit the 5,300 levels. The November futures of Infosys is expected to move up to around 2,920 and get support at 2,810. ITC will move up around 215 and Reliance around 920, the MKTP chart suggested.

The market profile suggested initiative buying from other time-frame traders after a strong opening for the European markets. The other time-frame traders aggressively moved prices higher to another value area, because they found prices were at an unfair value during the morning session. The strong volume above 5,196 and a significant premium to November futures (56 points) hint at a positive opening in Muhurat session on Wednesday.

The trade summary matrix showed buyers dominance above the 5,157-levels. The 25 per cent volume in the initial balance range (5,138-5,154), mostly through change of hands, indicated strong support at those levels. The rollovers in November series at 26.18 million shares were significantly higher compared to 19.33 million shares in October series on the day of expiry, suggesting long rollovers.