Nifty to face resistance above 6,100

As expected, the Nifty futures opened on a positive note and even hit a new high of 6,093, before finally settling at 6,054 on profit-booking at higher levels. The September futures, which moved in narrow band of 30 points all through the day, saw unwinding of 5.59 million shares in open interest (OI)— mostly through sell-side trades above 6,055.

The Nifty October futures added 3.28 million shares in OI through short positions at higher levels and a long build-up at lower levels. The trading in call and put options and the sharp fall in the last two trading sessions hint at a Nifty level of 6,022 for Tuesday.

The Nifty September futures opened above the previous session’s high of 6,035, but moved in narrow band in the value area (6,055-6,085) with 60 per cent volume and 61 per cent time-price opportunity (TPO) periods of 30 minutes each. This clearly indicates that buyers are getting tired even as sellers are becoming equally cautious.

Some higher level resistance for the Nifty was observed during intraday trade, with only 17 per cent volume and that, too, mostly through sell-side trades and 15 per cent TPOs above 6,085. The September futures look strong on the intraday market picture chart with a TPO and volume-based projection of 6,112.

Options participants booked profit in the 5,900- and 6,000-strike calls and built up short positions in the 6,100-strike call on expectations of expiry of the Nifty between 6,000 and 6,100.

Short-covering was seen in the 6,000-strike call and fresh shorts in the 6,100-strike put. This clearly means some resistance is expected for the Nifty above 6,100 with hedging of long positions. The OI build-up in the 6,100-strike call and 6,000-strike put suggests that the index may hold its support of 6,000 and face resistance above 6,100 levels.

Among stock futures, as expected, State Bank of India moved up to around Rs 3,200 on short-covering in the morning session. The futures, however, closed at Rs 3,178 on profit-booking at higher levels. The intraday trading volume in the last two hours indicate a fresh sell-off with TPO-based support at Rs 3,160.

Profit-booking tripped Hindustan Unilever’s bull-run on Monday. The TPO data indicates a price level of Rs 302, while a volume-based upside of Rs 321 can be expected for HUL in future.