The Nifty September futures closed at a discount to spot below 5,600 on profit-booking at higher levels. Options traders booked profit in the 5,500-5,600-strike calls and covered short positions in the 5,500-5,600-strike puts, hinting at a weak outlook for the Nifty. The trading data in Nifty futures and key stocks futures, as well as the weak global markets, indicates a soft opening tomorrow.

The Nifty futures crossed the 5,600-mark, but moved down quickly to close at 5,585 from an intraday high of 5,616 on profit-booking. Positional traders were not willing to buy the Nifty above 5,585 and there were no sellers below 5,570. The point-of-control (PoC) – the price level where the market has spent the most time trading – saw double distribution at the 5,580-5,590 price level, which means there is a fight brewing between the bulls and bears.

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The Nifty September futures closed at a discount to spot and added 1.36 million shares in open interest (OI), which indicate a build-up of short positions. A market picture chart on the basis of Bloomberg data shows the mid-point above the PoC. This means some new lows will be required to move the mid-point below the PoC. In other words, the Nifty is projected to move down to around 5,562 during Wednesday's session. A price projection on the basis of volume indicates support at the 5,552 level.

The options traders sold in the 5,500-5,600-strike call and built fresh shorts in the 5,700-strike call. Significant put writing was seen in the 5,500- and 5,600-strike puts options. This means the next two days will witness a range-bound market with strong support at 5,500 and resistance above 5,600 levels.

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