Nifty looks set to hit fresh all-time highs and cross the 16,000 levels in July series, while Bank Nifty may rally, if it crosses 36,000 levels, say analysts.
Nifty looks set to hit fresh all-time highs and cross the 16,000 levels in July series, while Bank Nifty may rally, if it crosses 36,000 levels, say analysts. In the series that ended yesterday, the Nifty 50 index posted gains for the third consecutive series, adding nearly 3 per cent. While Bank Nifty underperformed in June series, settling with nearly a per cent loss. Both the indices saw rollovers up to 85 per cent, which were much higher than their three-month average. The high percentage of rollovers in the June series as against the last three series average rollovers indicates a positive sentiment in the stock markets, according to the analysts.
What do Nifty, Bank Nifty rollovers data say?
Usually, the lower-than-average rollover suggests uncertainty, while higher rollovers than the three-month average signal positive sentiment in the market. “Nifty saw rollovers at 84.61 per cent as against the three-month average of 76 per cent and Bank Nifty witnessed rollovers at 83.88 per cent over the three-month average of 76.4 per cent,” Sameet Chavan, Chief Technical Analyst, Angel Broking, told Financial Express.
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“We have seen a rollover of 89 per cent in the stock futures to the July series as against the last three series average rollover of 87 per cent,” Nandish Shah, Senior Derivative & Technical Analyst, HDFC Securities, told Financial Express Online. He also added that in terms of the number of shares, the July series has started with stock futures Open interest of 421 crore shares as against 437 crore shares, a level at which the June series had begun. It is 20 per cent lower than the all-time high Open Interest of 523 crore shares, which were seen at the beginning of the February 2018 series. “This lower OI, despite Nifty being at an all-time high, indicates lower leveraged positions which augur well for the markets,” Shah added.
Where will Nifty, Bank Nifty go in the July series?
Nifty July series outlook
Shah advised traders to remain bullish and use any corrections towards 15600-15700 levels to accumulate long positions with stop loss of 15400. “On the higher side, we expect Nifty to cross 16000 levels and go beyond in the coming days,” he said
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services, sees an up move in the Nifty 50 index only if it moves past the 15850-15900 zone and stays above it. If that happens, then Nifty is likely to reach 16,400-16500 levels.
In the July series, Nifty may finally reach the new milestone of 16000 but the complete runaway move is unlikely, said Sameet Chavan. In between markets might see some bouts of profit booking as well. “As far as levels are concerned, 16000-16200 are the upside levels to watch; whereas on the downside, the base seems to have shifted higher towards 15600-15450,” he said.
Bank Nifty July series outlook
Nandish Shah said the July series started with the higher Bank Nifty future OI of 19 lakh shares as against last series OI of 17.7 lakh shares. In percentage terms, Bank Nifty has seen a higher rollover of 84% as against last three series average rollover of 78%. This higher rollover along with the more than thousand-point recovery from the low during the last few days indicates a long rollover to the July series,” Nandish Shah added. Bank Nifty, traders should remain bullish and accumulate long positions on decline towards 34500 levels with the stop loss at 33500 levels. On the higher side Bank Nifty may find an immediate resistance in the vicinity of 36000-36500 levels. “We expect Bank Nifty to do well in the July series,” he said.
Milan Vaishnav said Bank Nifty will have to cross 36,000 levels for any sustainable up move. “So, until the Nifty moves past the 15850-15900 zone and the Bank Nifty surpasses 36,000 levels, all up moves will stay vulnerable to sell-offs at higher levels in the July series,” Milan Vaishnav said.
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