Friday, 1 August 2014

Deri Roll JULY to AUG 2014

Rolls in NIFTY futures lower than last month with NIFTY rolls at 68% (last month 71%), higher than 6-month average of 63.3%, also in value terms, it is at 10943 Cr. versus 11109 Cr. (NIFTY was up by 3.5% in last series, number of shares have decreased to 141 lakh versus 147 lakh shares). On other hand, market wide roll was flat at 81% (last month 79%) in value terms 53386 Cr which is more than last month 58284 Cr., (in share terms it saw decrease, along with price action as some individual stocks have increased 10-15% on price chart) leading to overall position lower  64330 Cr Vs 69393 Cr. (dip M-o-M) in futures positions Roll Cost is at 0.36 which is lower Month on Month of 0.54, also below 3mth avg. of 0.70, with NIFTY cost also at 0.38 (lower than with  0.61 avg. of 3 months, and last month 0.53). Also, NIFTY/STOCK Fut. ratio has decrease to 0.21 (last month 0.19), implies market participants have increased bets on Individual stocks, implying market participants feel NIFTY may consolidate.
Nifty front PCR_OI opened below 1 at 0.78 (higher last month 0.73, but less than 6mth Avg. 1); with 8000 CE having highest OI across options as 39.9 lakh, (13.4 lakh shares add on Thursday), implying CE writers are convinced NIFTY will find resistance around 7950-8030; on support side PE OI  is at  7500 and 7600 31 and 27 lakh shares each, (Thursday 7500 add 9.2 and 7600 8.04 lakh Shares add), implying 7450-7550 will be crucial support zone; Index options positions have  increase to 64545 Cr (last month 59847 Cr) however if we take premium in consideration, Options increase in line with market participants clearly placing bets on VIX to move up till 19.9, till it remains below 19.9-20, Bulls will have upper hand NIFTY will continue to consolidate positive bias, We feel Nifty trading range for this series would be 7450-8030, as we enter the AUG Series.

Among stock futures positions have declined in Mid Caps and increased in Large Caps implying traders booking profits as we approach AUG.; making stock specific activity crucial; sectors that can outperform Index in the AUG. Series BANKING (PSU Banks), IT, INFRASTRUCTURE, FERTILIZER, FMCG, PHARMA, TELECOM C-o-C improve; On other hand Shorts seen CEMENT, CAP.GOODS, AUTO, FINANCE (Barring HDFC), POWER, REALTY; Individual stock picking required.

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