Rollovers to January series substantially lower

The Nifty faced resistance above 5,200 and closed below the trend-line resistance level of 5,182 on profit-booking at higher levels. The market will remain closed tomorrow and on Monday. Rollovers in the January futures were substantially lower at 10.22 million shares, with only three trading sessions left for the expiry of the December series. So we may see strong carry forward of positions.

The next three trading sessions are expected to be eventful, and if the Nifty closes above the 5,182 level, then it may go up to 5,350.

The call option participants seem to be aware of the likely upmove and have covered their short positions at the 5,300 call. This call option, trading at a premium of Rs 9.20, witnessed a trading volume of 5.10 million shares and added 386,800 shares in open interest (OI) through buy-side trades.

The 5,100-5,200 calls witnessed unwinding of short positions, indicating fresh upside.

According to a derivatives analyst at Angel Broking, participants who had short positions in call options are covering their positions, as market has given a significant positive move.

The trading pattern in the put options suggests that the Nifty is heading towards the 5,200 level, and is likely to trade above this level. The 5,200 put witnessed a trading volume of 8.18 million shares and added 1.53 million shares in OI through sell-side trades, indicating fresh support emerging at this level. The OI build-up in puts and calls suggests that the Nifty has strong support at 5,000-5,100 levels and resistance above the 5,200 level.

Despite the strong pullback in the last two trading sessions, rollovers in the January series for HDFC, HDFC Bank, Hindalco, Mahindra & Mahindra, NTPC, Reliance Communications, State Bank of India and Tata Steel were lower than in the December series. This indicates unwinding of short positions.