Nifty expected to cross 6,000 in May

As was expected, the Nifty opened on a positive note, but failed to hold the higher level over strong selling pressure from the other time-frame traders. Wipro and Reliance Industries, the top losers among index stocks, attributed to the 35 points fall on the benchmark index. The Nifty has been trading in a range between 5,696 and 5,945 for the last couple of weeks and is waiting for a breakout on the either side. However, the April series will expire tomorrow and based on the open interest build-up in the Nifty put and call options, it is unlikely that the market will show any significant movement tomorrow.

The Nifty April futures closed on par with the spot and saw unwinding of 1.3 million shares in the open interest, mostly due to rollover of both side positions and profit booking from other time-frame traders. The Nifty May futures settled at a 25-point premium to spot and carry open interest of 18.12 million shares, which were lower by 1.20 million shares, compared to the rollover in the earlier series on the penultimate day of the expiry. This means the market continues to be in strong hands, but there exists some hesitancy in build long positions. The favourable state elections results and better than expected corporate results may take the Nifty above 6,000 in the May series.

The open interest in the Nifty call and put options hints at resistance above 5,900 and strong support around 5,700. However, the open interest build-up in the 5,800-strike put options is higher than that in the same-strike call options, the Nifty may not settled below 5,800 tomorrow. The market picture chart hints at the TPO based upside around 5,925 in the April futures. The volume-based support is expected to come around 5,785. The Nifty May futures may face upside resistance at 5,927 while lower-end support is seen at 5,827. The spot Nifty may face resistance above 5,900 and strong support below 5,800.

The Bank Nifty is expected to move down around 11,700 and face resistance above 11,960. State Bank of India is expected to move down around Rs 2,887 and is expected to get volume-based support below Rs 2,870. Reliance Industries is expected to get support around Rs 976 and is likely to face strong selling pressure above Rs 1,019.