Nifty may slide below 5,400

As expected, the Nifty moved in a narrow band and faced resistance above 5,460, while still enjoying the support of 5,414, before closing on a weak note due to lack of buying activity at higher levels. The trading pattern in the Nifty July futures and projections, according to the Tom DeMark (TD) methodology, indicates the index may slip below 5,400 on Tuesday.

Resistance can be expected at the 5,445 level, which is at the higher end of the value area (5,420-5,445) for the Nifty July futures. Volume-based support on the basis of a market picture chart is projected at 5,377.50.

The Nifty August futures closed at a premium to spot and added 5.46 million shares in open interest (OI) intraday and 4.54 million shares at the time of settlement. Intraday data sourced from Bloomberg shows buy-side trades in the Nifty August futures, which indicate long rollovers. The rollovers in the next month's series – three days prior to the expiry of the July series – has been marginally higher at 9.21 million shares, compared to 8.68 million shares in the same period in the last series.

At the moment, bulls have low confidence in a sustainable recovery, even as bears have failed to time a momentum. Over all, there are not too many positives on the radar to bring in strategic investors in a big way, according to IndusInd Bank Global Markets Group Head Moses Harding.

It's no wonder then that the long unwinding in the July futures was higher at 4.54 million shares, compared to the rollover of 2.65 million shares in the Nifty August futures. The unwinding in the 5,500-strike calls and short-covering in the 5,500-strike put shows the confidence level of the bulls.

Among stocks futures, Cairn India and Bharti firmed up on short-covering and a long build-up.

Maruti Suzuki and Hero Honda slipped on profit-booking. Bharti Airtel and ITC moved in a narrow range and closed in the green. Trading data indicates a fresh upside for Cairn at around Rs 337-340 from the closing level of Rs 329.50. Bharti Airtel is expected to move up to Rs 326-328, based on time-priced opportunity (TPO) data and volume projections.

Maruti Suzuki, which closed at Rs 1,190, is likely to move down to around Rs 1,130 and get volume-based support at Rs 1,105. Hero Honda is also expected to slip to around Rs 1,767, according to TPO data.