F&O Outlook: Nifty may not cross 3,100 in short-term

The Nifty opened marginally lower on weak Asian markets but bounced back immediately and touched an intra-day high of 3,110 before slipping back into the red, down 38 points. As was expected, the index faced resistance above 3,100, while profit-booking led it to close at 3,039.
 
Technical analyst at Ambit Capital expects the Nifty to trade between 3,000 and 3,100 for some time before any major breakout from either side.

The Nifty seem to be facing a lot of supply pressure above 3,080 and support below 3,050 levels. For example, the Nifty December futures closed at 3,041, but the day’s trading average was 3,074, indicating that most trades were taken place above 3,041. Bloomberg data show that 56 per cent trading in the December futures took place at an average of 3,090, while 22 per cent trades were done below 3,050 levels.

Index heavyweights Reliance Industries (down 4.34 per cent) and ICICI Bank (down 5.87 per cent) too witnessed supply pressure coming in above higher levels. The December futures of Reliance witnessed trading volume of 6.88 million shares at an average price of Rs 1,325, of which 4.16 million shares changed hands at an average price of Rs 1,345, indicating higher level supply pressure.

Realty stocks witnessed fresh support with the December futures of DLF climbing 3.3 per cent on short-covering. January futures of the real estate major were up 3.3 per cent due to rollover of long positions.

Unitech gained 2.7 per cent on short unwinding in December series and long rollover in January series. Tata Motors rose 3.7 per cent as traders rolled over 1.72 million shares in January series on expectations that falling interest rates would help lift its commercial vehicle and car sales.

The Nifty 3,100 call witnessed changing of hands from buyers to sellers, indicating that the index has strong resistance above 3,100 levels. Put writers were seen covering their short positions at 3,100 put, indicating that the index was expected to close below 3,100-level.