Major movement not expected

The Nifty April futures consolidated at around 5,885-5,925 and closed in a Doji pattern, indicating indecisiveness among participants. A Doji pattern is formed when the opening price is the same or very close to the closing price. Interestingly, it was a double Doji formation in succession and throws a stronger sign, almost confirmation, that the market has found balance and is therefore in a state of indecision.

The market profile indicates a very narrow trading range (5,875-5,925) or non-trend day. This formation only occurs rarely and involves the day-traders more than other time-frame trader. The day-traders did 95 per cent of the volume in a narrow initial balance (IB) range (5,885-5,925) today and prices also does not move outside of the IB range all day. A non-trend day is usually followed by a change in trend.

The Nifty April futures closed below the value area (5,890-5,912) and also below the IB range with constant selling pressure above 5,910. The futures, however, moved within the previous day’s value area, indicating that the trend is slowing down and starting to find balance. In such market, both other timeframe buyers and sellers are responsive and push prices up and down.

It is very difficult to say anything at this point, as the trading volume in the Nifty futures dropped considerably today. The market picture chart shows strong consolidation below 5,900 as TPOs above the PoC (5,900-5,904) were 34 per cent, compared to 46 per cent in the lower portion of the PoC. This means the market may not move down substantially tomorrow. The MKTP chart hints at a resistance above 5,927 for the April futures and support at 5,867.

The Nifty April futures closed at a 12-point premium to spot and saw unwind of 1.50 million shares in the open interest through buy-side trades, indicating short covering from bears. The May futures added 2.30 million shares in OI and closed strongly at 5,913, a 26-point premium to April futures. This indicates strong undercurrent. If the change in trend after a non-trend day is positive, the Nifty may revisit the 6,000 level in the near future. The April futures of the State Bank of India is expected to consolidate around 2,900-2,930, with a price-based resistance seen at around 2,990. ICICI Bank is also expected to move up around Rs 1,139 and to get support at Rs 1,109. Reliance Industries may get support at around Rs 1,000.