Markets poised for fresh bull-run in January 2011
The Nifty maintained its bullish mode even on the day of expiry of the December series to close at 6,102, as the index strengthened above 6,050, forcing derivative players to cover short positions.
A close at the immediate resistance is good for bulls to retain positive momentum for the new F&O series. The market picture chart (MKTP) for the day’s trading session indicates a narrow band movement, with the Nifty likely to achieve volume base target of 6,155 tomorrow.
The domestic cues are positive and the only risk factor is the tight money market situation and inflation fears, says J Moses Harding, Head-Global Markets Group, IndusInd Bank.
The MKTP chart for the four trading sessions starting from Monday hints at an index level of 6,207, based on price projection using TPO and volume. The value area (6,045-6,120) saw significantly high rollovers. The IB range (6,030-6,045) was below the lower band of the value area, hinting at strong support for the Nifty below 6,030. The point-of-control (PoC), the price level where the market spends the most time trading, was above the upper band of the value area, signalling market strength.
Rollovers into the new series, at 19 million shares, have been significantly low, not seen at least in the past two years. Bears also allowed most short position taken in the December series to expire, as they expect the market to rise from the current level. A 28-point premium for the Nifty January futures to spot, with low rollovers, has also been reasonable compared to a 48-point premium to December series on the day of expiry of the November series. This clearly indicates the markets are poised for fresh bull-run in January.
Trade summary matrix (TSM) data indicate buy-side trades in the value area (6,114-6,130) and the initial balance range (6,105-6,134), the first two TPO time periods of 30 minutes each established by the liquidity providers. The January futures though moved in a narrow band, with the value area witnessing 75 per cent volumes, while 80 per cent seen in the time price opportunity (TPO), hinting at short long rollovers at those index levels. Though TSM data show profit-booking above 6,130, the top trade contribution indicates buy-side trades and a strong undercurrent.