Nifty may not move down sharply below 5,800

The market closed on a weak note on Friday, led by Infosys Technologies and higher inflation which put pressure for higher interest rates. Infosys triggered 51 point fall in the Nifty as the stock decline 9.9 per cent after missing the analyst estimates. The market picture chart indicates fresh weakness in Infosys with price and volume-based correction around 2,830. The Nifty April futures is expected to get support at 5,757 if selling continues on Monday.

The market picture chart for Friday’s trading sessions indicate initiative selling as the Nifty opened above the value area and declined steadily thereafter to hit the day’s low. The selling pressure was built-up by floor traders in the initial balance range — the first two time price opportunities (TPO) time periods of 30 minutes each — after Infosys Technologies disappointed. The other time frame traders joined the floor traders to take the Nifty April futures at 5,821.

Selling pressure is likely to continue and the Nifty futures may face strong resistance at 5,834-5,884 as the traders were net sellers in the value area as well as in the initial balance (IB) range (5,864-5,923). The Nifty spends some more time moving sideways for the next few weeks, and after consolidating in the range of 5,750-5,850 a breakout above 5,930 can take the index to 6,137.

The Nifty April futures closed at a 10-point premium to spot and saw profit booking of around 1.70 million shares during the intraday session. The market picture chart points volume-based selling around 5,780 and price-based resistance around 6,137. The spot Nifty could move down around 5,747 and upper level resistance is seen at 5,864. The Bank Nifty is expected to face resistance around 11,900 and likely to get support at 11,565.

The options traders covered short positions in 5,800-5,900-strike put options as they expect the Nifty may see some more correction around 5,757. The 5,800-5,900-strike call options saw fresh short positions and also some long build-up at the lower level. This means the Nifty may not move down sharply below 5,800 and likely to consolidate at the current level.