Nifty futures last Friday (May 3rd,2024) experienced some selling to close at 22575, thereby losing 0.87%. The major losers for the day were LT(-2.77%), Maruti(-2.45%), and NestleIndia(-2.24%).
The volume for the day stood at 10.96 million ( a relatively high volume compared to the last 10 days). The cumulative open interest (COI) stood at 11.72 million, a fall of 4% from the previous day. Though the daily fall in open interest is minuscule, the weekly COI stood at 47.7 million which is a WoW fall of 40%. The failure of Nifty to sustain the higher levels with a drastic fall in weekly COI may support some long unwinding in the futures contract.
Price analysis of the charts indicates some huge selling that has been experienced in the Nifty futures. On Friday the volume delta (net of buyers and sellers by volume) stood at -1.5 million (the highest in the last 2 months) but at present the future is placed at the support zone, so pullback in prices may not be ruled out.
Prices may pull towards the resistance of 22650-700 (monthly VWAP) and start falling towards the lower support level of 22400-350.
Traders may experience three scenarios in the next few forthcoming sessions
Scenario 1: Prices may move towards the resistance of 22650-700, the monthly VWAP, and thereafter breach the support of 22600-550 and fall towards the lower support level of 22400-350.
Scenario 2: Prices may breach and sustain the resistance of 22650-700-the monthly VWAP, with high volume, and resume the upward movement towards 22900-23000
Scenario 3: Prices may breach the support (22600-65) without testing the resistance and fall towards the lower support of 22400-350.
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