Low Rollovers for the July series: Angel Broking

Derivatives view by Ms. Sneha Seth (Derivatives Analyst, Angel Broking):

"We began July series with full of hopes expecting positive triggers from the Union Budget 2019. However the kind of reaction seen post announcement, clearly suggested disappointment and hence we witnessed a sharp sell-off thereafter to drag index towards 11500 mark in merely two trading sessions. After some respite towards 11700, once again fresh selling got attracted to conclude the series almost at the lowest points and down nearly 5% series on series.

During the major part of the series, we hardly saw any relevant build-up in index futures; however, good amount of shorting was seen in the expiry week. Stronger hands continued their selling streak from the third consecutive month, they sold to the tune of Rs. 12,394 cr this month (excluding today's figure) and nearly Rs.15,218 cr in last 3 months. Prior to this, they were net buyers from January to April series for the quantum of Rs. 58, 813 crores. Now, Rollovers for July series seems to be on the lower side, during the day it stood around 62% (Rollovers for June series was at 80.35%). After quite some time, we witnessed PCR-OI plunging below 1 and we believe this was mainly because of call writing during the series. Surprisingly, despite such a sharp sell-off the fear index too tumbled below 12% which has been unusual situation so far. At current juncture, 11100-11200 is an important support zone; whereas, 11400-11500 shall act as a hurdle in the near term. For the coming series, it's important to see FIIs positioning and their follow-up activity going ahead before any kind of bottom fishing."

Source : Equity Bulls

Keywords