The markets opened on a positive note, reacted sharply to profit-booking, and closed in the green on short-covering at lower levels.
As indicated, Nifty November futures hit a low of 5,925 and closed significantly higher at 6,036 due to positional buy trades in the value area (5,975-6,035). Interestingly, the spot Nifty closed in a Doji pattern after hitting an intra-day low of 5,906. Global cues are hinting at a strong opening tomorrow and so a Doji pattern indicates indecisiveness among short-sellers.
Nifty November futures closed at 32 points premium to the spot and shed 1.05 million shares in open interest (OI) on account of short-covering, mostly around the initial balance range established by the liquidity providers. Nifty December futures closed at 6,060, a 28-point premium to November, and added 930,600 shares in open interest, mostly through buy trades. The market picture chart using time-price opportunities (TPOs) and volume data suggests a strong opening tomorrow.
The index is expected to rise to around 6,118 before facing strong TPO-based resistance around 6,100. The price projection using volume is around 6,140. The technical short-term target is also likely to be around 6,140. However, the trading pattern in the Nifty futures for the past three sessions is hinting at a lower-side support at 5,870. The trading in call and put options, nevertheless, is hinting at support for the Nifty futures around 5,900 tomorrow.
The resistance continued to be above 6,200 due to significant formation of open interest in the 6,200-6,300-strike call options. The unwinding of short positions in the 6,000-6,100-strike call options through change of hands indicates derivative players expect the market to consolidate around 6,000-6,100. The open interest build-up in put options suggests support at 5,900 while unwinding in the 6,000-6,200-strike put options is hinting at a strong undercurrent.
Among stock futures, Cipla, Hindalco and Hero Honda are expected to move up afresh in the near future. The November futures of Cipla saw unwinding of short positions while open interest in the December futures was up 225 per cent. The TPO and volume picture chart of Cipla is hinting at a price level of Rs 370 and support at Rs 346. The November futures of Hindalco is expected to move up around Rs 230, the TPO and volume picture chart sourced from Bloomberg suggests.
