Rollovers not in favour of optimistic traders
“The benchmark index posted a new high in the mid of September series; but, this was followed by massive selling which again pulled Nifty towards recent lows.
September series began on a light note; however, we witnessed huge open interest addition during the series. Open interest surged 25% series on series and looking at the daily OI activity it seems majority of the positions that got rolled are on short side. Rollover in Nifty is at 69.87%, higher than its three month average of 65.41%.
As far as FIIs activities are concerned, they continue curbing liquidity through cash market segment as they sold to the tune of Rs. 17094 crores last series and total of Rs. 33094 crores in last two series. At the same time, they formed significant shorts in index futures and rolled major chunk of these positions. Thus, their index futures ‘Long Short Ratio’ plunged to 56% from 71% series on series post expiry; lowest in preceding 10 series. Taking into consideration the rollover activity, we believe market to remain under pressure going ahead. Traders are suggested to form shorts at any bounce back towards 9900-9950.”