Top stocks which are likely to remain in action in December series; do you own any?

At the current juncture, 10,000 put and 10,500 call options are attracting trader’s attention and will remain in a range for the index for the few sessions.

Jay Purohit

Centrum Broking

The November series started on a positive note as a lot of long positions rolled from the October expiry. The bullish momentum of the penultimate month continued in starting sessions of the November expiry and as a result, the index made a new ‘all-time high’ of 10,490.45.

But, foreign institutional investors (FIIs) didn’t participate in that up move as they started taking short positions in the index futures right from the start of the series.

They continued their selling momentum in the index futures throughout the first fortnight of the November series and as a result, their ‘Long Short Ratio’ (LSR) in index futures too came down from 70.40 percent (October 26) to 48.90 percent (November 16).

The Nifty50 failed to abide their selling pressure and corrected by around 400 points from its peak. Average of FIIs’ short positions in Nifty was around 10,370–10,420 and they defended that territory in the latter half of the November expiry when Nifty bounced back.

To get an exit with the profits, they didn’t give any chance to the Bulls on the expiry session and dragged the index lower below 10,250 level. At the current juncture, they exited 53 percent of their total positions in index futures on the expiry day ahead of events like RBI policy, US Federal Reserve meeting and Gujarat election; wherein shorts were more than the longs and as a result, the ‘LSR’ stood at 68.30 percent.

The November series F&O expiry ended with the loss of 1.13 percent over its previous expiry close. Rollovers in Nifty (63.28 percent) were below its quarterly average of 66.84 percent.

Also, rollovers were low in terms of open interest, indicating that the most of the positions formed in the last couple of months didn’t get carried forward to the next series.

At the current juncture, 10,000 put and 10,500 call options are attracting trader’s attention and will remain in a range for the index for the few sessions.

Rollover in BANKNIFTY (55.62 percent) was much below its quarterly average of 67.18 percent. In November series, we witnessed a good amount of open interest reduction in the banking index and as a result, open positions (Open Interest) in BankNifty are at the lowest level of the three years.

It indicates that most of the long positions, formed in the recent up move, are now out of the system. Since BankNifty is light on positions; formation of new positions will dictate the further movement of the index.

At the current juncture, strong support for the banking index is placed in the zone of 24,800-25,000 and a sustainable move below the same may not bode well for the Bulls as it will open a door for 24,000-mark.

On the flipside, 25,800-26,000 will remain a strong hurdle for the Bulls.

Stocks like Indian Bank, Biocon, Hexaware, Voltas, PC Jeweller, Jain Irrigation, Tata Power, Tata Elxsi, SRF and Dalmia Bharat added huge longs in the November series and the same got rolled to the coming month.

While in terms of stocks there were a good amount of short positions got rolled to the next series include names like Lupin, PFC, HPCL, Muthoot Finance, Vedanta, REC, Coal India, PNB, L&T Finance Holdings and Canara Bank.

do Pharma as it started correcting after the first week of the November expiry. The stock added a decent amount of shorts and the same got rolled to the December series.

Currently, the stock has a support around Rs670 – 675 and a breach of the same may lead to a correction towards Rs640 levels.

Capital Ways Investment Adviser
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