High rollover in Nifty indicating continuation in optimism: Angel Broking

Views of Mr. Jay Purohit (Technical and Derivative Analyst, Angel Broking):

"It can't be a better F&O expiry day for the Bulls as the market opened on a positive note and started moving higher right from the word go. The momentum accelerated as the day progressed and as a result, the Nifty managed to conclude the May series tad above the 9500 mark. With a 'gung-ho' momentum, the BankNifty too registered a new all time high and ended the session with the gains of around three percent over its previous close. The Nifty continued its winning streak by posting a positive expiry for sixth consecutive month.

Rollover in Nifty (74.09%) is higher is than its quarterly average of 69.36%, thus indicating that traders have rolled their long positions to the next series. However, the rollover in banking index (60.60%) is on lower side as compared to its average (68.40). On stocks front, long positions got rolled in liquid counters like Infosys, Hindustan Unilever, Voltas, Tata Motor DVR and Motherson Sumi. While, traders preferred to carry forward their shorts to next series in counters like Dr Reddys Lab, Idea, BHEL, Divis Lab and Cipla.

On index options front, 9300 – 9500 call (May series) writers seemed to be running for shelter throughout the session. However in June series, 9800 call option added huge positions; followed by decent build-up in 9500 – 9700 strikes. On the other hand, in put options, 9300 – 9500 are attracting trader's attraction and added fresh positions. At current juncture, highest open interest in June series is placed at 9600 call and 9300 put options.

FIIs too participated in today's rally as they were net buyer in both cash market and index future segment. They bought equities worth Rs. 589 crores; while they were net buyer to the tune of Rs. 371 crores in index futures. Today, FIIs have exited around 55% of their short positions in index future and added some fresh longs. As a result, their 'Long/Short Ratio' has increased from 65.50% to 81%. Considering overall rollover activity, we continue to maintain our bullish stance on the market and thus, advice traders to trade with a positive bias for an upside target of 9650 – 9700 level."

Source : Equity Bulls

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