Strong support at 5,632 likely

The spot Nifty and March futures achieved our targets — support and resistance — and closed at the middle of the day’s range (5,663-5,729) on profit booking at the higher level. We had indicated in our Sunday edition that the Nifty has strong support around 5,660 and face resistance above 5,737.

The market profile suggests a normal day as the participation rate was more of day traders (55 per cent volume in initial balance range) than other time frame traders. This profile reflects a greater imbalance in the direction of range extension and suggests the market is more likely to continue in the direction of the range extension.

The market undercurrent remained positive, but strong selling pressure above 5,705 hints at higher resistance level. The time-price opportunities (TPO) count above the point of control (PoC), the area of most traded price, throws some weak signal and selling activity as the number of TPO at upper portion of the PoC (5,700-5,705) were higher than the lower portion of PoC.

The trade summary matrix (TSM) data suggest sell-side bias and change of hands in the first two TPO time periods. The IB range (5,668-5,696) saw change of hands and 52 per cent volume and 56 per cent TPOs indicating price-based selling pressure. The futures closed at a 12-point premium to spot and shed over 2 million shares in open interest (OI) during the intraday trade indicating profit booking.

The price projection using TPOs and volume picture chart suggest target of 5,757 and support at 5,642. The spot Nifty is likely to move up around 5,707 and expected to get support at 5,632. The Bank Nifty is expected to move up around 11,730 and to get support around 11,500.

SBI is expected to move up around 2,790 and get support below 2,712. ICICI Bank is likely to move up around 1,137 and get strong support at 1,100. Larsen & Toubro is expected to see fresh upside around 1,667 and support at 1,610.

Options traders covered short positions in the 5,500-5,600-strike call options and built fresh short positions in the 5,600-5,700-strike put options. The OI build-up at 5,700-strike put options in the past couple of trading sessions hints at a fresh rally above 5,700 in the near future.