FIIs 'Long Short Ratio' surged to 61%: Angel Broking

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

"It's the third consecutive series in which the benchmark index has managed to close in the positive trajectory. During the November series, the Nifty consolidated in a narrow range of 11800-12050 for the initial three weeks and then surpassed the higher side of the range to hit a fresh record high. Eventually, we concluded the series at the highest point ever with gains of 2.28%.

During the early part of the November series, we witnessed mixed activity without any major open interest addition in either direction. However, the rally seen during the expiry week was supported with good amount of longs. If we look at the rollover figures, 79.64% of the positions in Nifty have been rolled to the December series which is slightly higher than the average of 78.94%, indicating long rollovers. On the other hand, Bank Nifty outperformed the benchmark index convincingly and rallied nearly 7% during the series. This rally was supported by huge long formations in the futures segment and these positions have been rolled too. Rollovers for the banking index stood at 70.56%, above the three month average of 63.94%. Apart from this, stronger hands continued pouring liquidity in November series as they bought equities worth Rs.14817 crores. In Index Futures segment, they preferred covering decent amount of shorts and rolled over longs in the coming series. As a result, the index futures 'Long Short Ratio' has surged from 43% to 61% after a quite some time.

Analyzing all the above data, we remain optimistic for the December series and expect this up move to continue. As far as levels are concerned, 11900-12000 is the immediate support zone for Nifty and any dip around these levels should be used as a buying opportunity. On the higher side, 12500 call option is attracting traders' attention and considering the above development, we expect a continuation of ongoing rally towards 12400-12500 levels."

Source : Equity Bulls

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