Nifty poised to move around 5,300

The Nifty moved in a narrow range and closed near the opening level on lack of follow-up support, indicating indecisiveness at higher levels. The trading in index futures and key stocks futures was within a small price range and hence it would be difficult to give an opinion on future direction.

The time-price opportunity (TPO) chart indicated traders were comfortable with buying Nifty March futures in the value area between 5,230 and 5,260, indicating a support zone. The volume above the value area accounted for 19.1 per cent trades, indicating resistance, while 10 per cent trades were below 5,230, indicating limited downside from current levels.

Nevertheless, Nifty March futures saw short-covering as it closed at a premium to the spot and shed 1.27 million shares in open interest. With only five trading days remaining for the expiry of the current month’s series, the participants started rolling over long positions in April futures, which added 0.89 million shares through buy-side trades. The estimates based on the TPO chart indicate the Nifty may face resistance around 5,300. The price projection on the basis of volume is around 5,207.

The 5,100- and 5,200-calls together shed 2.2 million shares in open interest through buy-side trades, indicating short-covering. The participants bought 5,300-strike call options (open interest up 0.92 million shares through buy-side trades) on expectation of a fresh rally above 5,300.

Traders wrote 5,200- and 5,300-strike puts (open interest up 3.3 million shares through sell-side trades), indicating the Nifty was poised to move around 5,300 in the near future.

Among key stocks futures, Reliance Industries closed in a Doji pattern on profit-booking at higher levels. Larsen & Toubro ruled firm on short-covering. The price projection using TPO chart suggests its March futures can rise to Rs 1,642 in the near future.