Nifty expected to move in a narrow range

As expected, the Nifty closed below 5,300 on profit-booking and weakness in the three front-line technology stocks, Infosys Technologies, TCS and Wipro, on account of a strengthening rupee. The Nifty is expected to move in a narrow range tomorrow and strong support is seen below 5,265. The time-price opportunity (TPO) data from Bloomberg suggest the index may bounce back around 5,365 in the near future with strong resistance around 5,385.

Nifty April futures, which closed at a premium to the spot, shed 499,700 shares in open interest, indicating profit-booking. Bloomberg data indicate that bulk traders (volume above 25,000 shares) booked profit in April futures above 5,325 and there was change of hands between 5,300 and 5,325. Call options data indicate the Nifty may not correct further as participants are building long positions in the 5,300 strike call.

Strong support is seen at 5,200 as the 5,200 put holds the highest open interest among put options. The 5,300 put saw change of hands, mostly through sell trades, which indicates that the index has the potential to bounce back above 5,300. The 5,400 put saw significant build-up in open interest (up 875,850 shares), mostly through sell-side trades, which indicates the index has the potential to move above 5,400.

Infosys Technologies moved in a narrow range due to profit-booking. The TPO projection using volumes indicates that the stock has strong support around Rs 2,630. HDFC Bank is expected to move in a narrow range and support for the stock on the basis of the TPO projection is seen at Rs 1,885.