The Nifty closed below 5,500 in a volatile session, due to macro-economic worries arising from surging crude oil prices on the back of the crisis in Libya. The market breadth was weak. Auto, metal, banking and capital goods stocks declined. Technically, the global markets have turned bearish and a sustained downward move is likely in the next one month. The domestic market may feel the heat after the expiry of the current series and the Union Budget on Monday. The put-side OI build-up suggests expiry will be above 5,400.
The Bank Nifty could not stay above 11,000 on account of profit-booking in key bank stocks such as HDFC Bank, ICICI Bank and State Bank of India (SBI). Bloomberg’s market picture chart indicates fresh weakness in bank stocks, and hence, the Bank Nifty is expected to open on a weak note. The support is expected around 10,705 and strong resistance at 11,025. SBI may face resistance at 2,779 and get support at 2,705. ICICI Bank may fall to 1,005 while HDFC Bank is likely to get support at 2,110.
Reliance Industries saw a volume-based surge, triggered by a deal with BP, which was announced after market hours on Monday. However, its February futures closed at 986.5 on account of profit-booking above 1,000. The market picture chart data suggest strong resistance above 1,013 and volume-based support at 969.
The trade summary matrix data for Nifty February futures indicate change of hands in the morning session and significant short-covering when the index fell below 5,470. The initial balance range (5,454-5,486) saw 63 per cent volume and 56 per cent time-price opportunities (TPOs), which hints at a volume-based short-covering at those index levels. The value area (5,455-5,500) saw buy-side trades and 70 per cent-plus TPOs and volumes. The selling pressure was evident above 5,500. This clearly indicates range-bound movement in the Nifty with strong resistance above 5,500.
Going ahead, the spot Nifty is expected to get support at 5,430. On the upside, there is strong resistance at 5,520-5,555-5,580. The March futures saw rollover of 11.12 million shares, as compared to 12.57 million shares in February last month.
