Rollovers galore: Advantage bulls

F&O OUTLOOK

Short covering in the derivatives segment and a better-than-expected GDP growth in the second quarter led the benchmark indices to close at their two-week highs.

Frontline technology, capital goods, finance and power stocks helped the benchmark indices close in the positive territory. However, the Sensex and the Nifty remain below the important resistance levels of 9,300/ 2,780, indicating continuation of the bearish pattern and restricted upsides. The Nifty December futures tried a breakout when it rose to the day’s high of 2,783, but could not hold on to the breakout level and closed at 2,753 on profit booking.

Technically, the Nifty is trading sideways in the range of 2,700-2,780. Trading above 2,780 will lead to bullishness and it will encounter resistance at above 3,000. If the Nifty slips below 2,700, one can expect weakness and a possible retest of the 2,500 level.Rollovers in the Nifty December series increased sharply by 7.65 million shares to 30.39 million on the last day of the current month series. This indicates that F&O players are hoping a technical breakout soon, which can take the iendex to beyond 2,800 with a target of 3,000.

Rollovers in key index stocks were higher compared with the October futures. Among the Nifty components, rollovers of long positions were seen in NTPC, Hindustan Unilever, Bharti Airtel, ITC and BHEL. The stocks that continue with short positions were Unitech, Tata Steel, Tata Motors and Steel Authority of India.

The options traders were seen buying the 2,800-3,000 strike calls of the December series as they expect the index to move between 2,800 and 3,000 in the next few weeks. However, some traders were seen writing 3,100 and 3,200 strike calls, indicating resistance levels if the Nifty moves above 3,000.