Rollover Report for April - May 2020: Angel Broking
Mr. Ruchit Jain (Equity Technical Analyst, Angel Broking):
- Nifty recovers sharply in April series - Nifty rollover in line with its average - FII's net longs in index futures - Nifty gains 14% in April series - FII 'Long Short Ratio' at 64.42% - India VIX declines sharply to 34 - Bank Nifty rollover higher than average
The March series was a relief for the bulls as Nifty recovered in the first couple of weeks of the month. Post some consolidation, the index resumed the momentum during the expiry week and ended well above 9800 to register gains of 14 percent over previous expiry's close.
During the series, Nifty witnessed open interest increase of 14 percent which indicates that the price upmove was due to combination of short covering and some fresh long formation. The rollover in Nifty is at 71.29 percent which is in line with 3-month average of 70.36 percent. The rollover in Bank Nifty is higher at 81.59 percent v/s 3-month average of 70.56 percent. However, the data indicates that the upmove in the Bank Nifty was more due to short covering in the last week. FII's started April series with 'Long Short Ratio' in index futures at 29.63 percent. During the series they covered their positions and even formed fresh longs when the index moved up. Their 'Long Short Ratio' now stands at 64.42 percent and thus they have covered much of their shorts.
The above data indicates that market participants covered short positions and formed some fresh longs in the series. The rollover is in line with its average and stronger hands too now have more longs in the system. India VIX too declined sharply and ended the series at 34. The important supports for the Nifty are placed around 9500 and 9200 levels whereas resistance is around 10000. Traders are advised to keep a tab on the market movement in next few days of the new series which would provide a clear idea on the probable short term direction.