Nifty continued the bullish momentum of the previous series and went on to touch its all-time high levels of 17,947 levels, just few points away from the landmark 18,000 marks. However, it witnessed some dullness in the concluding week but overall buying on every dip has supported the index. It rallied by more than 1,000 points from the previous series and has been forming higher lows from the last nine weeks in a row.
Commenting on the expiry, Chandan Taparia, Technical & Derivatives Research, Motilal Oswal stated, "Nifty concluded the August expiry at 17,618 levels and formed a healthy Bullish candle on monthly chart (expiry to expiry chart). The open interest activity in Nifty has decreased in the series and it fell by 6.50% on an expiry-to-expiry basis. Rollover of Nifty stood at 74.98%, which is lower than its quarterly average of 81.19%. Short covering was seen in the index but now it has to surpass its immediate hurdles to regain strength to head towards new milestone."
Nifty index continued its winning streak for the second consecutive series and saw good momentum in many sectorial indices. Market breadth remained totally in favor of the advancing counters as Mid-cap and Small-cap space witnessed strong momentum and outperformance to the broader market for most part of the month. "On sectoral indices front, we witnessed positive momentum in most of the sectorial indices among which Nifty Realty and Energy witnessed handsome gains of more than 15% to 35% in this series. Nifty Auto has also shown strength after the decline of the last two series while Nifty It and Nifty FMCG witnessed some profit booking decline in the last week of the series," he added.
India VIX increased by 36% from 13.53 to 18.40 levels in the September series. Volatility spiked to its multi week high levels and rose above 19.4 zones. Spurt in India VIX indicates volatile swings in the market and now it has to cool down below 15-14 zones to continue the smooth ride.FIIs turned net buyers in the cash market segment and cumulatively bought equities worth Rs 27,950 million crores in the September series. DIIs were net buyers worth Rs 74,670 million. Their ‘Long Short Ratio’ in index futures ranged from 49.14% to 68.22% in the September series.On option front, Maximum Put OI is at 17,000 followed by 17,500 strike while maximum Call OI is at 18,000 followed by 18,500 strike. Option data suggests a broader trading range in between 17000 to 18200 zones while an immediate trading range in between 17,350 to 17,850 zones. Nifty closed near 17600 zones and At the Money Straddle (October Monthly 17,600 Call and 17,600 Put) is trading at net premium of 660 Points, giving a broader range of 17,000 to 18,250 levels. Broader range is due to the higher volatility prevailing in the market.
Considering overall derivatives activity, Taparia expects Nifty to continue the bullish momentum but volatile swings cannot be ruled out in the market due to higher IVs. "A decisive move above 17,777 mark, may result into an up move towards 18,000 and 18,250 zone. On the flipside, major support can be seen at 17,350-17,250 zone."
Bank Nifty witnessed quite a volatile series and it surpassed its previous hurdle and outperformed the broader market. Bulls drove the index to its new high of 38,377 levels and it continues forming higher lows from the last five weeks. Long built up was seen in the September series as open interest saw a massive jump by 42.06% on expiry-to-expiry basis. Rollover in Bank Nifty also stood at 83.49%, which is higher than its quarterly average of 82.15%. The high rollover figure is due to the longs which are built in the index at higher levels. Crucial support for banking index is placed at 36850 and then 36,500 zone. On the flipside, immediate resistance can be seen around 38,000 and 38,350 zone, he said."
On stocks front, we witnessed long rollovers in IDEA, Indhotel, Mphasis, Indigo, Coromandel, Torntpower, PVR, PEL, Navinfluor, Ashokley, Mindtree, HDFC Bank, Bajaj Auto, GAIL, Metropolis, Powergrid, PIIND, Astral, Axis Bank, Exideind, Balkrisind, Aplltd, IGL, Adani Ports etc. While stocks like Nestleind, MCX, Tata Consumer, Divislab etc had short rollovers," he added.
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