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Traders’ rollover of bearish F&O bets hints at a gloomy December

Mumbai: Traders carried ahead bearish bets to the December spinoff sequence with the latest market rally working out of breath amid persistent promoting by international traders, stretched valuations, brokerage downgrades of Indian equities and considerations over sooner liquidity tapering by the US Federal Reserve.

Nifty rollovers on a provisional foundation stood at 82.57%, consistent with the three-month common of 82.31%, stated analysts. The November futures and choices contracts expired on Thursday.

“Rollovers are more on the short side and positions are more on the short side. Market is in a downtrend and the current bounce-back is shallow,” stated Siddarth Bhamre, director-alternative investments and analysis at InCred Equities. “Till the Nifty doesn’t go above 17,800 I wouldn’t advise adding longs.”

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The Nifty fell 1.8% within the November sequence and the Sensex slipped 2% throughout the identical interval.

The Nifty had touched a document excessive of 18,604.45 on October 19 and the Sensex touched an all-time excessive of 62,245.43 on the identical day.

Amid expiry of November sequence on Thursday, inventory markets regained some misplaced floor after a bumpy journey in the previous couple of days. The Nifty ended up 131.05 factors, or 0.75%, at 17,546.10 and the Sensex ended up 454.10 factors, or 0.78%, at 58,795.09. A 6% surge in Reliance Industries contributed to most of the positive factors within the indices.

FPIs offered native shares price ₹2,300.65 crore and DIIs purchased to the tune of ₹1,367.8 crore.

“FPI activity is not negative in derivatives in the last two-three sessions, but previous short positions are still intact. Total long positions of FPIs as a percentage of FPI positions is 53-54%, which is not a bull market situation,” stated Bhamre.

Analysts see the 17,200 degree as a essential help for the Nifty as a fall under that will open the door for a contemporary spherical of promoting.

“Going into the December series, we expect the index to trade in the range of 17,200 to 17,800. A revisit to 17,200 is not ruled out,” stated Sriram Velayudhan, vp — different analysis at IIFL Securities. “17,800 has become a strong resistance as important points like the neckline of head and shoulders breakdown and the 34-day exponential moving average coinciding with it. Only in an event where this key level is breached on the upside, room for higher levels would open up,” stated Sriram.

Rajesh Palviya, head — technicals and derivatives at Axis Securities, additionally stated the Nifty is more likely to transfer within the 17,200-17,800 band within the December sequence.

“A breach on either side will decide the market trend. Real estate, telecom and textile companies are likely to outperform in the December series,” stated Palviya.

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Thursday, December 2, 2021

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