Nifty to face resistance at 5,300-5,400

The BSE Sensex and the S&P Nifty closed 1.4 per cent lower on weak global markets as fears about Greece’s fiscal health resurfaced. This sparked profit-booking in banking and metal stocks. Nifty April futures fell below 5,300 on profit-booking with 24 per cent volume changing hands below 5,310. The futures saw sell volumes around the value area (5,310-5,360), which fell below the previous day’s level (5,350-5,385), indicating liquidation by participants.

The market picture chart, which displays time and volume at price in the form of distribution, shows poor volumes in April futures above 5,360. This means this level will act as a supply zone in the near future. Options traders booked profit in call options below 5,300 strikes on fear of a fresh correction. The 5,300 call added 1.77 million shares in open interest through sell trades, indicating short build-up.

However, the 5,400 call added 0.75 million shares in open interest, mostly through buy trades, indicating hedging of short positions. Options traders covered short positions in 5,300- and 5,400-strike puts and sold the 5,200 put. This means they expect the Nifty to face resistance at 5,300-5,400 and strong support around 5,200.

Among stock futures, Reliance Industries saw profit-booking around the value area (1,112-1,112) and strong buying around Rs 1,108. The time-price opportunity (TPO) chart indicates an upside of around Rs 1,149. ICICI Bank fell 2.6 per cent on profit-booking to Rs 960.20. DLF saw non-trend trading, mostly due to weak sentiment. The April futures closed in the green at Rs 333 on fresh long build-up by institutional traders.