The January series expiry may have failed to shed light on which way the market is headed given that the Nifty futures positions observed healthy roll-overs while accumulations of traders position in the options segmental indicated that 6,000-6,200 is still perceived as a crucial levels for a directional breakout.
At 64.4%, the Nifty roll-overs into February were tad higher than previous month, but slightly below its three-month average of 66%. The February future maintained a robust premium of about 64 points over the spot Nifty, supporting the street expectations that the February series may see a range-bound movement in the initial period with an upward bias. Notably, the Nifty has moved in a tight range in the last two weeks even after touching new two-year highs in the period.
While Nifty constituents like Axis bank, Maruti Suzuki, Sesa Goa, and Sun Pharma witnessed healthy roll-overs or more than 80%, many bluechips like Bajaj Auto, Bank of Baroda, Bharti Airtel, Tata Motors, Mahindra & Mahindra, ITC all saw 65% to 75% of futures positions being turned into February and March series.The Banknifty observed 67% of roll-overs; Bank of India, Dena bank, Federal Bank, IDBI Bank and Punjab National Bank all observed strong roll-overs ranging from 80% to 86%.
Strong long-rollovers were also observed in some of the stocks from oil & gas industry, including BPCL, HPCL, Cairn India even as IT stocks including HCL tech, Infosys and TCS experienced muted roll-overs of about 56% to 70%. Some of the midcap and investment sensitive counters like HDIL, Hexaware, BHEL and Sesa Goa are believed to have observed short positions being rolled over.
Traders are now expecting the Nifty to take support near 6000 mark and extend its gains towards 6200.
“ The Nifty is in a consolidating phase and there is a likelihood of its stretching its gains towards 6200 or 6400 mark as long as the implied volatility trades below 17 mark,” said a trader.
For the February series, the maximum accumulations of open interest on call and put side were observed at the strike of 6200 and 6000, respectively, reinforcing the view on the index.
India VIX, a gauge of the underlying market volatility, inched up to 15.17 on Monday ahead of the RBI’s credit policy after hovering near its all time low of 13.04 in the last two months. On Thursday, it fell by 1.7% to 14.13. Generally the market volatility is observed to fall when the market is on a strong uptrend. It is a measure of the amount by which an underlying Index- the Nifty- is expected to fluctuate, in the near term.