After making a big-move towards the 5,400-mark along with a strong roll-over of the October futures series, the Nifty has once again given up its momentum. Nifty has traded in a narrow range of 200 points since the start of the November series and on Tuesday it closed at 5,289. However, traders are hopeful of the benchmark index maintaining its bullish bias, as long as it manages to hold above the support level of 5,200.

On the higher side, however, 5,400 mark is seen as the most crucial resistance because it coincides with the Nifty?s 200 DMA ( Day Moving Average), a long-term gauge of market direction. Generally, the Nifty?s position with respect to its 200 DMA indicates the underlying tone of the market; the trend is considered bullish if the Nifty quotes above its 200 DMA and bearish if it?s below this benchmark.

While the Nifty briefly touched the 200 DMA on October 28, it failed to cross above this barrier for the third time since November 2010, when the bear phase begun in Indian markets. Earlier the Nifty on two occasions had tried to move above its 200 DMA in July 2011, as it rebounded by more than 10% from its June 2011 low of 5,190.

Siddarth Bhamre of Angel Broking sees market to maintain its positive bias and move towards 5400 levels in the days to come. ? Foreign Institutional Investors (FIIS) while not selling in the cash market, have increased exposure in the call options. This clearly indicates that the market is more likely to see an upward move towards 5400+ levels for nifty.?

According to Bhamre, FIIs bought options worth R2,182 crores in the in the November series as of Friday. This buying activity along with a decline in the Put Call Ratio (PCR), which declined from 1.49 to 1.37 indicated their rising exposure in call options.

For the November series, 5,400 calls are currently holding the maximum open interest of about 60.9 lakh shares on the call side. On the put side, 5,000 strike maintained the highest open interest of about 51 lakh shares.

According to Savio Shetty, derivatives analyst with Prabhudas Lilladher, a shift in the highest open interest on the put side towards the higher strike of 5,100-5,200 confirms the bullish bias amongst traders. On Tuesday, both, November 5,000 and 5,200 puts added close to 3.4 lakh shares in open interest.