The Nifty June futures opened on a weak note, made rapid up move at 5,559 after crossing the crucial volume-based resistance of 5,543. However, the futures settled marginally below 5,543 as participants preferred to book profit at the higher level. The responsive buying from other time-frame traders was seen in the morning session as the Nifty opened below the value area, but prices moved up higher from open as buyers respond to price below value. The responsive buying, narrow band movement in the June futures above 5,520, and the presence of other time-frame traders in the initial balance (IB) range (5,444-5,436) suggests strong undercurrent and a clear dominance of bulls.
The market saw a non-trend session above 5,520 and ,hence, we may see fresh upside tomorrow. A non-trend session, though, does not signal a new vertical move, but there is a possibility of fresh upside around 5,615-5,627 in the near future. The trade summary matrix, or data, for the day hints at buy-side trades indicating short covering. The market saw buying range extension as the Nifty rallies above IB range. Importantly, the range extension has also occurred above value area and, hence, the market may not see sharp correction in the near future. The market picture chart (MKTP) hints at a volume-based upside around 5,627 and strong support below 5,480-5,460.
The Nifty June futures settled at 5,534, a six-points premium to spot and saw unwinding of 2.35 million shares in open interest (OI) through buy-side trades. The July futures settled at 5,548 and added two million shares in OI through buy-side trades that hint at bullish undercurrents. The options traders expect the Nifty to stay and settle above 5,500 in the June series, and ,hence, they covered significant short positions in the 5,500 and 5,600-strike call options.
The short covering of more than two million shares in the 5,500-strike call options and short build-up of 1.50 million shares in same strike put options hints at new support level for the Nifty. The fresh addition of 3.05 million shares in open interest in 5,600-strike put options through sell-side trade is a most positive development for the bulls who expect the Nifty to cross 5,600 level in the coming sessions.
