Weak opening likely on Monday

The Nifty May futures yesterday touched the 5,600 level on favourable poll results, but settled at 5,558, as participants booked profit in the last 30 minutes of trade. We had indicated an upside of 5,617 and lower-end support below 5,460.

The Nifty futures closed below the crucial resistance point at 5,580, so it is very difficult to indicate any significant upside. The volume in the initial balance range (5,465-5,515) was negligible and hence, the Nifty futures are expected to get strong support at that range. The SGX Nifty was down 66 points at 5,515 on Friday evening and hence, we may see a gap down opening on Monday.

The trade summary matrix, or data on indicative buy-sell bids by traders, hints at change of hands with buy-side volume from top trades. It means a few participants booked profits, while big traders covered short positions. The market profile shows the equilibrium between buyers and sellers, as the time price opportunities count above and below the point of control (5,550) at 45/47 were evenly match. This is a clear signal of higher-level selling pressure and lower-end support for the Nifty futures going ahead.

The Nifty May futures closed at a 14-point premium to spot and shed 1.89 million shares in open interest, indicating short-covering from bears. The Nifty is expected to consolidate around 5,515-5,550, but for any significant up move, closing above 5,580 is very crucial. The market picture chart hints at a price-based resistance above 5,642 for the May futures and 5,632 for the spot Nifty. The volume-based selling pressure is expected to come around 5,662. The May futures are expected to get support below 5,517, while for spot, support is seen at 5,477.

The May futures of bank Nifty are expected to face resistance above 11,350 and volume-based support is in place at 10,800. For State Bank of India, support is seen at 2,587 and resistance at 2,685. Options traders covered short positions in the 5,500-5,600-strike call options to protect losses. However, open interest build-up at 5,600-strike call options continues to be higher than the same strike put options and hence, the Nifty may face resistance above 5,600.