Tech view: Nifty in resistance zone

The markets are likely to witness intra-day profit booking at around 4950 (Nifty) as five days relative strength index (RSI) at 80 indicates overbought positions.

Incidentally, the Nifty level of 4955 is also close to its 50 days simple moving average (DMA), thus it can act as a resistance level.

No wonder, Nifty reacted from high of 4951 and currently (1115 hrs) trade at 4911. The support for Nifty is seen at 4895 level which is also 39 DMA level.

The trading in nifty futures during the first hour of trade was more of supply side than demand side. Already the huge premium to Nifty April futures has vanished now and April futures are currently trading at discount of three points.

The open interest in Nifty April futures has gone up by almost 3%, which indicate fresh shorts built-up by bears.

The activities in options contracts suggest that bears are not ready to surrender the 5000 level. The call OI at 5000 strike price has increased by over 7% to 35.55 lakh shares. The OI at 5000 strike price is also 28% of total OI in call options indicating strong resistance line.

The better than expected results from Infosys Technology has triggered fresh buying in technology counter. The April futures of Infosys are currently up by around 4% while OI up 5% indicating built-up of long positions.

Fresh long built-up is seen in Satyam Computer as
its April futures up 3.6% and OI up 7%.