Nifty may see near-term trading range of 5000-5200

The Nifty opened the week on a negative note and long unwinding was seen from an intermediate resistance zone of 5100-5200 during the first two trading days of the week, as Nifty futures closed on negative note and open interest (OI) kept declining.

We are looking at a range-bound scenario at current index levels. There is stiff resistance at 5100 levels, making an upmove very difficult.

On Tuesday, the Nifty broke important 5060 levels on downside. But there was no major build-up of short-positions. Since the start of December, 5200-5300 Call witnessed highest open interest, which has been important barrier for price advance till now.

From Tuesday onwards, largest open interest call has been shifted to 5200-5100-5300, which shows the 5100 level may also show some resistance. On the downside, the highest open interest build-up has been seen in 5000-4900-4800 Put, which shows good support coming these levels.

PCR has been maintaining just above one from start of the week. As per US markets, Dow Jones has been trading in the 10515-10230 range for the past four weeks. The overall picture presents a range-bound market to be continuing in the Nifty, 5000-5200 short term or broadly 4800-5300.



On Thursday, for the first time in this week, Nifty futures closed with 5.25 points discount at 5036.50 levels with decrease in option interest, which shows bears are trying to take control in the Nifty from 5060-5100 levels.

Good option interest increase with positive price movements was seen in textile and fertiliser sectors. Good option interest increase and negative price movement were seen in cement and realty sectors.

Good stock-wise build-up in option interest and positive price movement were seen in Pantaloon and Zee stocks. Negative price movement and option interest increase was seen in JP Associate and DLF stocks.

(Puneet Kinra, Senior Technical Analyst Bonanza Portfolio)