After a below-average rollover of the May series, Nifty June series rollover bounced back to 66.6%. This healthy rollover accompanied by a healthy premium of 11.5 points between the Nifty June and July future hint to an upward bias for the equity market. Even the rollovers at the individual stock levels remained healthy at an average of 83%, with about 75% of the stocks experiencing long rollovers.
?Given that (T-1) rollovers, rollover on a day prior to expiry, for stock futures were at a two and half years high along with a strong addition in the open interest of the Nifty futures hinted at the likelihood of healthy rollover of June series futures,? said Savio Shetty, research analyst ? Institutional Derivatives at Prabhudas Lilladher.
Experts believe such healthy long rollovers along with trend in the build-up of Nifty July options indicate that the market could move towards 5,750-5,800. On the other hand, the sustained buildup in the July 5600 calls highlight the-near term support the Nifty is likely to get at this level.
?Nifty has managed to trade at a 100 point premium to its 50 DMA ( Day moving Average), a medium-term market indicator, the rally may continue towards 5750,? added Vijay Kanchan, Head of Institutional Derivatives at JM Financial.
For the last two days of the expiry the Nifty July future added more open interest than the drop in open interest witnessed by the June future; 30 lakh shares on Wednesday and 10 lakh shares on Thursday. Such build up generally indicate addition of fresh longs, said a derivative expert.
Shetty said another indicator which shows that July series is starting on a positive note is the ex-June Put Call Ratio (PCR), the PCR of all Nifty options excepting that of expiring June series, which is at a strong 1.19 against ex-May PCR of 0.98 when the May series expired and June series started.
Sector wise, a number of FMCG and fertiliser companies like ITC, HUL, Dabur, Chambal Fertilizer, Nagarjuna Fertilizer experienced healthy roll-overs of the range of 80-83%.Tata Motor DVR experienced a strong roll-over of 92% following the steep discount (47%)at which it was trading to the stock ion Tuesday.