Nifty may face strong resistance above 5,300

The Nifty moved in a narrow range, faced resistance around 5,300 and closed around its lower level support of 5,250 due to weak global markets and profit-booking in key index stocks. The April futures continue to trade at a premium to the spot, which indicates that participants are covering short positions at lower levels.

The index is expected to consolidate near 5,250-5,300 before moving above 5,300. According to the time-price opportunity (TPO) area, the buy and sell orders were restricted to 5,250-5,285, indicating a higher-level resistance. The support for the Nifty on the basis of TPO charts is at 5,227. Call options data indicate the Nifty may face strong resistance above 5,300.

Nifty April futures saw buy trades around the value area, but shed 64,750 shares in open interest, which indicated that participants covered short positions around 5,250-5,285. Interestingly, of the total trading volume of 21.84 million shares, only 14.5 per cent changed hands above 5,285, indicating resistance at higher levels.

The 5,200 puts added 1.26 million shares in open interest, mostly through sell trades, indicating support. However, participants built positions at 5,300- and 5,400-strike puts on expectation of a fresh move above 5,400 after consolidation.

Among stocks futures, profit-booking was seen in frontline software stocks due to the appreciation of the rupee. The price projection on the basis of volume and TPO charts indicates limited downside from current levels. HDFC showed some strength above Rs 2,720 as its April futures closed above the value area (2,650-2,720).

HDFC Bank, which was seeing profit-booking in the last couple of days, showed significant strength above Rs 1,935. The stock is expected to get support at Rs 1,895 and can move up around Rs 1,965. Reliance Communication saw buying at lower levels with strong buy volume in April futures above Rs 170.45. The price projection using TPO charts indicates that April futures can move up around Rs 182.