Rollovers, trading guide for May series; FIIs, retail carry short positions

Data from NSE shows that retail investors have turned net bearish in index futures for the first time in six months; while DIIs remain the most bullish among market participants.

In spite of a 0.3 per cent dip in the NSE Nifty 50 index on Thursday, the benchmark index ended April derivatives series with a 2.8 per cent gain at 24,247 - thanks largely to a sharp 7-day rally in the latter half of the series.  Going ahead, Rajesh Bhosale, Equity Technical Analyst at Angel One expects the Nifty to trade within a range of 23,900 to 24,500 in the near-term.  Technically, the previous resistance zone of 24,000 – 23,900 is now expected to act as strong support. On the upside, immediate resistance is seen at 24,400, followed by a critical level at 24,550, which marks the 61.8 per cent retracement of the decline from all-time highs, Rajesh said. 

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FIIs, DIIs, retail - who is bullish and bearish?

  The NSE derivatives data shows that retail investors have now turned bearish in index futures for the first time since October 3, 2024. Retail long-short ratio has dropped to 0.84 - this ratio implies that they now hold more than one short position in index futures for every long trade.  Similarly, foreign institutional investors (FIIs) and proprietary traders too are seen starting the May series with short positions. FIIs long-short ratio in index futures stands at 0.69; while proprietary traders at 0.48.    FIIs, in particular, are seen starting the May derivatives series with lighter positions in index futures. FIIs open interest (OI) in Nifty futures is down 13.9 per cent at 68,938 contracts when compared to the start of April series. OI is down by 19.3 per cent in terms of rollovers in Bank Nifty; whereas FIIs have higher rollovers in MidCap Nifty futures, up 20.4 per cent.  Meanwhile, domestic institutional investors (DIIs) have carried forward their bullish bets into May, with a long-short ratio at 3 - implying 3 long positions in index futures for every short bet. 

F&O cues by Samco Securities

  The derivatives setup is starting to reflect a shift in sentiment from aggressive bullishness to a more cautious tone, said Dhupesh Dhameja, Derivatives Research Analyst of SAMCO Securities in a note.  Call writers have stepped up their activity, outpacing Put writers, suggesting the first signs of bearish bets building, he explained.    Substantial open interest at the 24,500 strike Call marks it as a short-term ceiling, while strong Put writing at the 24,000 strike underpins solid support. This puts the 24,400 – 24,500 zone under the spotlight as a crucial resistance band.  Meanwhile, the Put-Call Ratio has eased to 0.93 from 1.04, highlighting a mild shift in sentiment. The Max Pain remains centred at 24,100, implying that traders are bracing for sideways action, with overhead resistance weighing on sentiment, the note stated. 

Key rollover statistics

  Among individual stocks, 18 per cent of the futures & options contracts saw over 95 per cent rollovers to the May series. Prominent stocks among these were - Crompton Greaves, JSW Energy, IndiGo, Glenmark Pharma, Union Bank of India, Escorts, Grasim, HDFC AMC, LIC Housing Finance, SAIL, Jindal Steel, Siemens, PolicyBazaar, DLF and Adani Enterprises.