Rollover Report for May-June 2019: Angel Broking

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

It was indeed a historical series for the benchmark index as we finally surpassed the most awaited magical figure of 12000. During the series, we saw some profit booking in the first half and then in the midst, fresh buying emerged prior to the exit poll results. We saw a spectacular run as exit polls were in favor of the existing government. On the actual result day, Nifty clocked record highs but couldn't sustain at higher levels due to strong profit booking as the final outcome was more or less in line with exit poll numbers. Post the event, the volatility cooled off drastically and then gradually we continued our march in the northward direction.

During the series, we observed decent long formation in both the indices and we believe some of these positions have been rolled over too. Rollovers in Nifty stood at 71.93%, slightly higher to the 3-month averages. Throughout the series, stronger hands formed hedged positions (selling index futures and buying equities) which resulted in a decline in their index futures 'Long Short Ratio' from 75% to 50%. However, on the expiry day, they rolled over fewer shorts which brought this ratio back to 60%. The volatility index rallied towards 30% (Highest since September 2015) before the Lok Sabha election results and soon cooled-off, which is the normal phenomenon post the event. At current juncture, 12500 call and 11500 puts are attracting trader's attention. Considering the rollovers and the price action in heavy weight individual counters we maintain our optimistic stands on market and soon expect Nifty to surpass the immediate hurdle of around 12000 mark.

The rollover for the banking index is 82.99%, above its 3-month average of 77%. BankNifty out-performed the benchmark index and also added decent positions series on series. As this index has already given a fantastic run, we would now focus on other sectors like IT and oil marketing companies.

Source : Equity Bulls

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