Rollovers above averages, avoid shorting: Angel Broking

Views of Ms. Sneha Seth (Derivative Analyst, Angel Broking):

"October series was indeed a Diwali bonanza for our markets as the benchmark index registered a fresh record high and achieved yet another milestone of 10350. Finally, post consolidation seen in last two series index gained momentum and we also witnessed decent amount of long formation in index futures segment.

Historically, there has been a trend whenever FIIs start selling in equities, markets tends to take it negatively; but, this time, history is not getting replicated. In fact, this entire selling has been completely overshadowed by the enormous and relentless buying from domestic institutions (DIIs). However, FIIs did participate in the recent rally by forming good amount of longs in index and stock futures last series. In addition, they also bought index call options along with writing in index puts; this clearly indicates they formed bullish bets in F&O space.

Now, Nifty Rollovers is at 72.69% which is above its 3 month average of 65%; while, in terms of open interest as well it's on the higher side. Thus, we believe major chuck of the longs formed in last series has been rolled over, which suggests continuation of ongoing momentum. At current juncture, 10500 call option is attracting traders attention; while, maximum concentration of open interest in puts is firmly placed at 10000 strike."

Source : Equity Bulls

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