The Nifty closed above 5,100 and November and December
futures closed at a premium to the spot, indicting fresh upside
tomorrow, the last day of expiry of this month’s series. The index
is set to cross a new high in a day or two as long positions in
November series have been considerably high despite the fact
that only a day is left for expiry of the November series. Also, the
Nifty December series closed at 12 points premium to the spot
and added 4.91 million shares in open interest, suggesting long build-up.
Interestingly, despite two day left for expiry of the current series, open interest in 5,200 put options of the November series has increased by almost 50 per cent, mostly through sell-side trades. This means a few traders expect the index to break the October high of 5,181 today itself.The set-up is now ripe for markets to complete the V-shaped recovery by testing the highs of October 2009 in the next few days. A short knee-jerk reaction from those levels is a possibility before the indices head towards the medium-term target and the supply zone of 5,270-5,300.
The rollover in Nifty December futures were at 63.4 per cent compared to 63.6 per cent in the November series at the same time last month. In absolute terms, the rollovers were higher at 22.04 million shares compared to 20.23 million shares at the same time last month. The rollovers in the December series are mostly through buy-side trades and hence we may see the index moving above the October high of 5,181 on Friday.
The rollovers in key index stocks such as HDFC Bank, ICICI Bank, Infosys Technologies, Tata Motors and Tata Steel were considerably higher than in the previous months despite most of these stocks having gained 10-15 per cent in a month, indicating long build-up. The rollover in Reliance Industries was at 400,000 shares. Bharti Airtel and Reliance Communication saw unwinding of long positions due to valuation concerns.
Trading view: trade long if nifty sustains above 5200 fut on Tuesday. TGT 5260-5300 fut.
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